Bankrupt Crypto Lender Celsius Reaches Agreement to Return Digital Assets in Custody Program

After months of litigation, Celsius recently revealed it has reached an agreement with the Custody Ad Hoc Group and the UCC on a Settlement that reportedly “returns most digital assets in the Custody Program to account holders who opt in to the Settlement.”

Custody users who elect to opt into the Settlement will “receive a total of 72.5% of their Custody Program digital assets back over time in exchange for (i) electing not to pursue any Custody-related claims or causes of action prohibited by the Settlement and (ii) voting in favor of the Plan.”

As noted in a blog post by Celsius, if you are eligible to opt in to the Settlement, you “will receive an email from Stretto.”

In this communication, you will “receive a unique PIN that can be used on the Stretto Settlement page linked in your email.” You can also go to the Stretto page “to enter your Custody-related email address to receive the Stretto email with the unique PIN and further instructions.”

As explained in the update, you can “submit an election opt in form using the link included in the opt in notice from Stretto.”

You can also enter your Custody-related email address “to receive the Stretto email with your unique PIN and further instructions.”

As clarified in the update, your assets will “remain on the Celsius platform.” Clients will have the opportunity “to agree to the Settlement again in connection with the chapter 11 plan.”

Settling Custody Account Holders will “receive the first half of such Settlement (36.25%) once the 30-day opt in period has passed and the Debtors are able to process withdrawals, which is expected to be approximately 15 days after the 30-day opt in period expires.”

The second half (36.25%) will be “made available for distribution upon the earliest of: (i) the effective date of the Debtors’ Plan, or shortly thereafter (ii) the dismissal of the Debtors’ chapter 11 cases or conversion to cases under chapter 7; (iii) June 11, 2023 if no plan has been filed by then; or (iv) December 31, 2023.”

If you opted into the settlement, then the assets eligible for withdrawal “will be available approximately 15 days after the 30-day opt -in period expires.”

At that time, please “reference their Custody Account Withdrawal FAQ to learn more about the withdrawal process.”

This Settlement “only applies to Custody Account Users.”

If you elect to participate in the Settlement, you will have “to agree to vote your Custody claims in support of the Debtors’ chapter 11 plan.” You will “retain the right to vote your other claims (other than Custody claim) however you wish.”

As clarified in a Tweet by Simon Dixon, a Fintech and banking industry veteran:

“To comply with Judge Glenn’s entity claims opinion, Celsius is modifying the Schedules and SOFA to be against only Celsius Network LLC & not other Debtor entities. Loans claims will be against Celsius Lending LLC only. Due to the change, Celsius is required to amend the bar date to April 28, 2023. You will have to file a claim if you want to asset Non-Contract Claims.”

Check here for more details.

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