The money is made up of cryptocurrency kept in custody accounts on Celsius and wasn't moved from earned accounts.
The $44 million order
A federal judge has ordered cryptocurrency lender Celsius (1) to provide consumers of the platform's custody program access to cryptocurrency valued at about $44 million. United States Bankruptcy Judge Martin Glenn reportedly gave the spoken order during a hearing on December 7 and noted:
"I want to see this case through. I want the creditors to get their whole amount back as quickly as possible. The sum is a minuscule portion of the billions Celsius owes creditors, and the most recent disclosure solely refers to cryptocurrency kept within custody accounts. The choice was made when stakeholders and Celsius advisors agreed that the platform's users, not it, owned the cryptocurrency in the custody accounts.
It is significant to note that this judgment solely relates to assets stored in the custody program that have never touched Celsius' Earn accounts have never touched.
Celsius's mismanagement
As of August 29, Celsius had approximately $210 million in custody accounts, but only about $44 million of that money met the requirements of the most recent order. On the other hand, the majority of the $4.7 billion in user money is presently held in Celsius' Earn accounts, which were the accounts that allowed depositors to earn interest.
We intend to use this time to continue developing a plan for a stand-alone business, as we explore all value maximizing opportunities available to us, for the benefit of our customers and other stakeholders.
— Celsius (@CelsiusNetwork) December 6, 2022
According to Celsius, A December 5 Bloomberg report, users who made deposits have claimed (2) that Celsius is looking to sell $18 million of stablecoins held in these accounts to fund its reorganization. Glenn is scheduled to address the issue of fund ownership on December 12, according to the report. Funds within its earn accounts gave up ownership of the funds when they agreed to the company's terms of service.
#CELSIUS HEARING LIVE: They will adjust the KERP motion to take into account withdrawals and transfers into custody by these KERP employees. Headcount currently is 170 employees net ~20 that are still in the process of leaving. Judge Glenn is reading out the whole ruling.
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) December 5, 2022
On December 5, the judge authorized the lender's $2.8 million key employee retention program (KERP), which it had submitted on October 11. Select employees will get bonuses meant to keep them working for the company so that it may continue its modest commercial activities. Only 170 Celsius employees are still employed due to widespread employee resignations. Three hundred seventy employees when it first began the bankruptcy procedures, a considerable decrease from that number.
