Celsius Network, a troubled cryptocurrency lender, has informed a New York bankruptcy court in a petition that it will return around 22% of the monies it has in its possession to 58,300 customers, whose assets are worth a combined $48M.
The information was disclosed at a hearing on a motion to allow the Celsius Network debtors to reopen withdrawals for clients whose assets are being kept in custody on September 1.
“We’re not foreclosing the possibility that we’ll be back before you seeking to release all of the custody funds, [which] may be subject to clawback claims. We’re just not there yet,” said Ross Kwasteniet, a partner with Kirkland and Ellis representing Celsius.
$4.3 billion in debt
According to Celsius attorneys, the amount allegedly held in custody is in the range of $200-$215 million. The legal team also described the company’s current efforts to safeguard its existing assets. These include putting an end to new loans, coin transfers, swaps, and swaps, as well as ceasing its staking activities.
According to the bankruptcy filing, Celsius owes its users about $4.3 billion. This has many people speculating about how the company will be able to raise the additional funds necessary to pay off the outstanding debts while attempting to restructure and navigate the bankruptcy process.
“Following their analysis, the Debtors have identified significant cryptocurrency assets that they do not believe are property of their estates, and as to which the Debtors do not believe that they have any colorable causes of action under applicable law,” the filing said.
To recoup “stolen” assets, Celsius sued the former management
In a separate event, Celsius sued Jason Stone and KeyFi Inc., its former investment manager and firm, seeking disgorgement of millions of dollars in assets and the restoration of corporate property. In order investigate funding options, it is also involving unsecured creditors.
After obtaining $690 million in several investment round series in 2022, the firm was valued at $3 billion, according to the bankruptcy petition.