Celsius prepares to reopen partial withdrawals for eligible users

After completing KYC and other account updates, Celsius members will have access to 94% of their assets.

On February 15th, bankrupt cryptocurrency lender Celsius made an announcement that it will begin alerting consumers who are qualified to begin withdrawing money from specific custody accounts.

According to the release, Celsius has already included the list of qualified consumers into its distribution plan and will notify individuals through email and in-app prompts as to what to do next. Celsius has not yet said when it will resume withdrawals. Withdrawals will resume for U.S. clients exclusively, while users elsewhere must wait for additional court orders.

Lenders are required to return cryptocurrency held in custody accounts that were never a part of Celsius’ Earn or Borrow program (referred to as “Pure” custody assets) and assets moved out of the Earn or Borrow program in the 90 days prior to Celsius’ bankruptcy filing in July (referred to as “Transferred” custody assets).

Customers can access their whole balance of pure custody assets at any time. Withdrawals are permitted only for users whose transferred custody assets total less than $7,575, while users with more over this amount are unable to make withdrawals at this time.

The court has thus far only given Celsius permission to restrict withdrawals to 94% of consumers’ holdings. The availability, timing, and manner of withdrawal of the remaining 6% will be determined at a later date by the court. Additionally, the court has not yet decided when Earn customers will be allowed to retrieve their money.

According to the court ruling, current and former employees of Celsius and its subsidiaries are not allowed to make withdrawals. Also, users with outstanding loans as of December 20, 2022, and qualified users whose balances are less than the withdrawal transaction costs, will be unable to make withdrawals. Users having a total amount of transferred custody assets in excess of $7,575 will also be subject to the hold.

Users who are qualified for Celsius’s enhanced security features will be asked to update their know-your-customer (KYC) information, even if it has already been validated. Users must also enter a withdrawal address, which may be used beginning after 24 hours have passed.

Celsius users are subject to the Travel Rule, which necessitates that they disclose extra information with respect to each withdrawal address. In order to comply with the Travel Rule, financial institutions must collect and share information about beneficiaries and loan originators.

In order to withdraw funds from a whitelisted wallet, users must verify that the withdrawal wallet belongs to them, give information about the beneficiary crypto service provider, and prove ownership of the withdrawal wallet.

After resuming withdrawals, Celsius warned that it may take more than 24 hours to process requests due to the influx of users.