Celsius bankruptcy: Deadline approved for customers to file proof of claim
Crypto lender Celsius Network (CEL), which filed for bankruptcy in July 2022, has had its request approved by a US court to set a deadline for customers to file proof of claim during the ongoing bankruptcy proceedings.
The US Bankruptcy Court of the southern district of New York set 3 January 2023 as the deadline for Celsius customers to submit a claim.
Celsius said via Twitter “customers should expect to receive a notice regarding the bar date and next steps in the proof of claim process” from its claims agent Stretto via email, physical mail or a notification through the Celsius app.
A video helping to explain the process has also been released by Celsius for its customers. The crypto lender added that its next hearing is scheduled for 5 December where the company “plans to advance discussions around custody and withhold accounts”.
Celsius went to say it was “monitoring the environment across the industry” and wanted to “assure its customers that data and asset security remain a top priority for all” at the business.
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Celsius exposure to FTX
When the crypto lender said it was “monitoring” the crypto environment, it may have been alluding to cryptocurrency derivatives exchange FTX. which also filed for bankruptcy on 11 November.
At that time, Celsius detailed how it was observing the events surrounding FTX and was “keeping in close communication” on these matters with key stakeholders, as well as ensuring that its singular focus was to “maximise stakeholders value”.
Celsius stated that in the interest of transparency the crypto lender had 3.5 million serum (SRM) tokens on FTX, of which most are locked.
In addition, the quantitative crypto trading firm Alameda Research – the sister company of FTX – had outstanding loans to Celsius that totalled $13m (£11m). Both businesses were founded by former FTX CEO Sam Bankman-Fried.
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‘Difficult but necessary’
When Celsius made the decision to announce its bankruptcy filing, it stated it was “difficult but necessary”.
The company said doing this gave it the “opportunity to stabilise its business and consummate a comprehensive restructuring transaction that maximises value for all stakeholders.”
Prior to that in June, the crypto lender paused all withdrawals, swaps, and transfers between accounts, citing “extreme market conditions”. Alex Mashinsky, co-founder and former CEO of Celsius, said at the time of the bankruptcy filing:
“I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”
Mashinsky resigned as CEO on 27 September after the company appointed former chief financial officer Chris Ferraro to the role of chief restructuring officer and interim CEO.
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