Celsius is a company that operates in the field of lending and cryptocurrency trading. Recently, the company has faced serious issues and has been involved in lawsuits and accusations of fraud.
On August 10th, Judge Martin Glenn will conduct a hearing to address the matters related to Celsius. The goal of this hearing is to resolve $78.2 billion in unsecured claims. To make a decision, the court will consider all responses and objections from the parties involved. However, in order to participate in the hearing, individuals need to submit their responses before August 3rd.
One of the proposed agreements is to increase compensation by 5% for those affected by the allegations of fraud and misconduct by Celsius management. However, creditors still have the option to opt out of this arrangement and pursue individual claims against Celsius.
Additionally, a second settlement agreement has been proposed to address the issue with customers who have funds in Celsius’ Interest-Earning Program. According to this agreement, customers who have borrowed cryptocurrency will be able to receive a portion of their funds in cryptocurrency assets, along with compensation in the form of stocks from the new company resulting from the bankruptcy proceedings.
Celsius filed for bankruptcy in July 2022 after announcing a suspension of all withdrawals due to the collapse of the Terra ecosystem, causing market turmoil.
On July 13th, 2023, former CEO Alex Mashinsky was arrested on criminal and civil charges of fraud and market manipulation. However, he denied all of these accusations.
Also on July 13th, financial regulatory bodies such as the Securities and Exchange Commission and the Federal Trade Commission filed lawsuits against Alex Mashinsky and other executives of Celsius for raising “billions of dollars” through fraudulent and unregistered offerings. The Federal Trade Commission also imposed a fine of $4.7 billion on Celsius for allegedly “misusing billions of users’ deposits” and selling “cryptocurrency asset securities.”