Celsius Network and its account holders have reached a new agreement that could expedite the settlement of more than 30,000 claims against the bankrupt cryptocurrency lender.
According to court documents filed July 20, many of the $78.2 billion claims seek damages for fraud, misrepresentation and other non-contractual causes, which must be resolved before payouts can be distributed.
Rather than resolve the issues, the parties agreed, subject to court approval, to increase the amount plaintiffs would receive to cover the alleged damages.
“Unless and until these claims are resolved, the Debtors would have to ‘withhold’ distributions to creditors that could otherwise be paid under the Plan. If the Settlement is approved, each Account Holder who does not opt out of the Settlement will receive a 5% increase in its Account Holder Claims (other than Custody Claims)…
A full court resolution of all non-contractual claims made against the Debtors would be a lengthy and costly endeavor which would significantly delay distributions and ultimately may not lead to any change in the recoveries.”
The crypto lender, which promised customers high returns for depositing their coins, froze customer withdrawals in June 2022 due to extreme market conditions. It filed for bankruptcy the following month.
Its founder, Alex Mashinsky, was arrested earlier this month and faces a slew of charges, including securities, commodities and wire fraud.
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