- Proof of Claim must be submitted by customers of the defunct crypto lender no later than January 3, 2023.
- Cryptocurrency lending platform Celsius Network filed for bankruptcy this year after a liquidity crisis plagued the industry.
- The independent examiner in the Celsius case said the company had “inadequate” accounting and operational controls over client funds.
The US Bankruptcy Court for the Southern District of New York has given the green light to bankrupt cryptocurrency lender Celsius to set a deadline for users to file evidence of a claim in the company’s ongoing bankruptcy proceedings.
The proposal by Celsius, which was approved by the US Bankruptcy Court for the Southern District of New York last week, says affected consumers have until January 3, 2023, to submit proof of a claim. Claims can be submitted to a claims agent, StratoBy mail, in person, or on the website. This includes individuals, partnerships, corporations, joint ventures, and trusts.
Celsius created a post on Twitter reminding its former subscribers of the recently approved court deadline. They also have detailed instructions on how to file claims. In addition, the Celsius app will send a notification to users.
A percentage lacks proper accounting and controls for users’ funds
The decision was reached shortly after the independent examiner in the Celsius case concluded that the company’s management of client funds was subject to “inadequate” accounting and operational controls.
The authorities closely monitor Celsius’s operations. Customers alleged that the defunct cryptocurrency lender used the assets of the new users to cover existing returns and facilitate withdrawals. And so, on November 1, the presiding judge issued a ruling ordering an investigation into the reasonableness of Celsius being a Ponzi scheme.
In July, Celsius Network went bankrupt, just a few weeks after it placed restrictions on user withdrawals due to a liquidity crunch in the industry that began earlier in the year. I have sought the lender Protection under Chapter 11 of the Bankruptcy Code In order to restructure while conducting business as usual.
Celsius CEO Alex Mashinsky resigned in September after being accused of being responsible a A string of bad deals At the start of 2022. A few weeks before the business stopped allowing withdrawals, in May, Mashinsky was reported to have taken up to $10 million from a company account.