Celsius Network Seeks to Unfreeze Some Customers Funds

Celsius Network ran into liquidity issues and froze client withdrawals, transfers, and swaps on June 12. The lending platform is headquartered in Hoboken, New Jersey and has over 1.7 million registered users and approximately 300,000 active users with balances greater than $100. Celsius filed for chapter 11 bankruptcy and claimed a $1.2 billion hole in its balance sheet.

A court filing earlier today includes a motion seeking permission to unfreeze certain customer accounts. Celsius is arguing that certain assets belong to the customers and were not company property. Celsius is trying to release funds held in its Custody Program and Withhold Accounts back to customers.

The Custody Program includes Custody Assets, Pure Custody Assets, and Transferred Custody Assets.

• Around 58,300 users hold Custody Assets worth approximately $210 million in total.

  • Around 15,680 users hold Pure Custody Assets worth approximately $43.87 million in total.

  • Around 22,580 users hold Transferred Custody Assets worth approximately $11.25 million in total.

• Approximately 5,500 users hold Withold or Pure Withhold Assets worth around $16 million in total

This would return roughly $226 million in customer funds lost to the bankrupt platform.

The company is also wrapped up in lawsuits. Celsius filed suits against Prime Trust and KeyFi for malpractices in late August. According to Celsius, Prime Trust acted as crypto custodian for New York- and Washington-based users from 2020 through mid-2021, returning $119 million in crypto following the end of the business arrangement but holding back some funds: 398 Bitcoin (BTC), 3,740 Ether (ETH), 2,261,448 USD Coin (USDC) and 196,268 Celsius (CEL).
Celcius claimed that KeyFi used Tornado Cash to launder funds. Tornado Cas is the Ethereum-based decentralized currency mixing platform that was recently sanctioned by the US Treasury.

Read more on Celcius vs Prime Trust and KeyFi on Info Hub (Premium)