Bankrupt Crypto Lender Celsius Sets Bar Date on January 3rd 2023 After Court Approval

At its peak, Celsius managed more than $10 billion (roughly Rs. 81,181 crore) in crypto assets.

Bankrupt Crypto Lender Celsius Sets Bar Date on January 3rd 2023 After Court Approval

Photo Credit: Celsius

Celsius said that customers should expect to receive a notice regarding the bar date

  • Celsius plans to discuss custody and withhold services
  • Celsius filed for bankruptcy protection in July
  • The next date for court proceedings is scheduled on December 5

Defunct cryptocurrency lending company Celsius Network has announced that the bankruptcy court has granted its motion to "set the bar date" for customers to file a claim. Per the announcement, customers now have until January 3, 2023, to file their proof of claims. Celsius further said a notice on the bar date, and steps to the proof of claim process will be communicated with the customers via their provided contact information and the Celsius app, by its claims agent, Stretto.

Customers of the bankrupt lender are exempt from submitting proof of claim if they fall into one of the categories listed in the legal document, such as if any claims have already been paid by what remains of the company and a similar form has already been filed with the clerk of the bankruptcy court in New York.

"As a reminder, customers who agree with Celsius' scheduling of their claims as filed in the Schedules of Assets and Liabilities do not need to submit a proof of claim and no further action is required of them at this time with respect to such claim," Celsius said on Twitter.

In the next court hearing, scheduled for December 5, Celsius said they will discuss matters relating to its Custody and Withhold services, which according to an examiner, had shortfalls in controls and operations.

As per a Bloomberg report, Celsius examiner Shoba Pillay found that the company operated its Custody service "without sufficient accounting and operational controls or technical infrastructure." Consequently, Celsius failed to account for a shortfall of 24 percent shortfall (roughly $50 million or Rs. 406 crore) in custody wallets on June 24.

For the Withhold service, Pillay said Celsius made no effort to segregate or separately identify any crypto assets associated with the users' accounts. And for that, “customers now face uncertainty regarding which assets, if any, belonged to them as of the bankruptcy filing,” Pillay added.

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Further reading: Cryptocurrency, Celsius
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