Bankrupt crypto lender Celsius has put in place a process through which some users will be allowed to withdraw the majority of their assets from the platform, court documents published on 31 January revealed.
The 1,400-page document, filed with the New York bankruptcy court on Tuesday, lists the names of users who had their crypto in custody when Celsius disabled withdrawals in June, and who are now eligible to withdraw their assets. According to the document, Celsius received the court’s permission to return 94% of each eligible user’s assets, though there will be certain requirements. Customers are expected to receive an email from Celsius that lists the steps on how to process the transfers around 15 February.
In order for users to withdraw their assets, they will first be asked to update their Celsius account with some required data, including additional information for the company’s Anti-Money Laundering (AML) and Know-Your-Customer (KYC) policies, as well as details about the users receiving addresses. Celsius also noted that users who do not have sufficient assets to cover the withdrawals gas and transaction fees “will not be permitted to withdraw their assets”. The document reads:
“Unless and until an eligible user updates his or her account with the required account updates, such eligible user will be unable to withdraw his or her distributable custody assets from the debtors’ platform.”
The list of eligible customers was released shortly after a court-appointed independent examiner submitted his report on certain aspects of Celsius’ operations. According to the examiner, the crypto lender’s problems started back in 2020 when it started using customer assets to fund operational expenses and rewards. The company had also concealed to what extent it was market making for its own CEL token, and that it had used new customer deposits to fund other user withdrawals prior to disabling withdrawals for all users.