Celsius Network and its account holders have reached a new agreement that could expedite the settlement of more than 30,000 claims filed against the bankrupt crypto lender.
According to court documents filed on July 20th, many of the $78.2 billion worth of claims seek damages for fraud, misrepresentation and other non-contractual causes, which require resolution before payouts can be distributed.
Instead of resolving the issues, the parties agreed, subject to the court’s approval, to increase the amount that claimants would receive to cover the alleged damages.
“Unless and until those claims are resolved, the Debtors would have to ‘hold back’ distributions to creditors that could otherwise be paid out under the Plan. If the Settlement is approved, it will provide each Account Holder that does not opt out of the Settlement with a 5% increase of their Account Holder Claims (other than Custody Claims)…
A fully litigated resolution of all of the non-contractual claims that have been asserted against the Debtors would be a long and costly endeavor that would significantly delay distributions and may not ultimately lead to any change in recoveries.”
The crypto lender, which promised high yields to customers for depositing their coins, froze customer withdrawals in June of 2022 citing extreme market conditions. It filed for bankruptcy the following month.
Its founder, Alex Mashinsky, was arrested earlier this month and is facing a slew of charges including securities, commodities and wire fraud.
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