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According to the Wall Street Journal, Celsius Network, the crypto lending company that went bankrupt and is working to return customer funds remaining on its platform, is on track to make an agreement that the court can approve for refunding customer funds. The agreement is expected to resolve customer claims regarding the funds.
Court Approval Expected for the Agreements
Celsius Network, the crypto lending company that shocked the crypto world with its bankruptcy, is working to reach an agreement that can secure court approval for the return of customer assets. The agreement is expected to resolve customer claims made for fraud and misrepresentation by increasing the recovery of funds by 5%. Through these agreements, it is expected that approximately 30,000 customer claims, amounting to $78 billion in funds, have the potential to be resolved.
The court will approve the agreements on August 10th, and the approval hearing for Celsius Network’s restructuring plan will be held in October. It is being emphasized that customers will be able to start receiving payments for their remaining cryptocurrencies and other assets in the company before the end of the year.
Meanwhile, although some customers have filed compensation claims alleging that the previous management used customer funds for their own interests, Celsius Network’s lawyers argue that customers will not be able to receive more than the amount they deposited on the platform.
Federal Regulatory Agency Filed Lawsuits Against the Company and Former CEO
The U.S. Securities and Exchange Commission (SEC), the federal regulatory agency, filed a lawsuit against Celsius Network and its former CEO Alex Mashinsky earlier this month. The charges brought by the SEC against the company and Mashinsky include conducting fraudulent and unregistered securities offerings, making false statements to investors, and manipulating the price of the CEL token.
Celsius Network filed for bankruptcy about a year ago, marking one of the most significant crypto collapses. Prior to the bankruptcy, the company had approximately $30 billion worth of assets under management at one point.
