Courts have ordered cryptocurrency lending firm Celsius to reimburse clients with funds totalling roughly $44 million, Bloomberg reported this week.
The report noted that United States Bankruptcy Judge Martin Glenn had verbally delivered the court order, which includes custodial cryptocurrency accounts, totalling $44 million.
He stated at the time: “I want this case to move forward. I want creditors to recover as much as they possibly can as soon as they possibly can.”
The news comes after Celsius reached an agreement with advisors and stakeholders of the company that cryptocurrencies held in custody accounts belonged to users and not the platforms hosting them.
According to the court order, the mandate will apply to crypto holders that have never used Celsius Earn accounts.
Figures show that Celsius hosts roughly $210 million USD in custody accounts. Celsius Earn accounts provide interest to depositors, reaching $4.7 billion in user funds.
Currently, users cannot access these funds. Celsius has disputed claims that Earn accounts qualify for ownership due to the company’s terms of service.
Bloomberg reported on 5 December that the crypto company aims to sell $18 million of its stablecoins from Earn accounts to restructure.
Around the same time, a judge approved a $2.8 million key employee retention programme (KERP) filed on 11 October. This will allow employees to receive bonuses in exchange for loyalty to continue working with the company and its current limited business activities.
Reports revealed a massive exodus of employees over the last few days. The company has lost 200 employees since the platform filed for bankruptcy, with only 170 remaining.
The news comes after the FTX bankruptcy, which rocked cryptocurrency markets on 11 October, due to a massive insolvency crisis. This has cascaded across the cryptocurrency industry, leaving multiple firms short of funding and triggering investigations from US, Bahamian, and other global authorities.
