Crypto Lender Celsius Seeks Unstaking of $470M Ether And Urges Creditors for Fund Return

By: Eliza Bennet

Embattled crypto lending platform, Celsius has begun recalling and rebalancing its crypto assets, including Ether (ETH), to prepare for timely distributions to creditors. The firm notably unstakes its existing Ether holdings which has provided valuable staking rewards income in the past. This move comes as part of the firm's preparations for bankruptcy proceedings, ensuring adequate liquidity for asset distributions.

In related events, Celsius customers, especially those who made substantial withdrawals within a 90-day period predating the company's bankruptcy declaration, find themselves under legal heat. The firm's bankruptcy managers are urging these customers to return some of their funds, with potential for further legal consequences. Customers are required to provide a payment equal to 27.5% of their 'withdrawal preference exposure', a measure of assets withdrawn and subsequent deposits made.

Creditors with unresolved 'withdrawal preference exposure' must settle their claims soon or risk delay in distributions. The Account Holder Avoidance Action Settlement proposed by the firm in their Modified Joint Chapter 11 Plan of Reorganization could provide some relief if these plans are accepted.

As the bankruptcy plan unfolds, the crypto community is keenly watching further developments, while the firm's customers grapple with unexpected legal implications. The culmination of these proceedings will yield insightful ramifications for the industry and the distribution of funds.