Bankrupt Celsius Sees Fresh Trouble: New Customer Repayment Demands Emerge
Celsius, the bankrupt crypto lender, is facing renewed pressure as a new set of customers demand repayment, adding another layer of complexity to its already troubled situation. This comes despite Celsius having emerged from Chapter 11 bankruptcy in the United States, a process intended to reorganize and distribute assets. Celsius is set to start distributing $3 billion worth of crypto and fiat to creditors, along with launching a new entity. But for many, the promised repayments are insufficient.
The initial bankruptcy stemmed from a period of instability in the cryptocurrency market, leading Celsius to freeze withdrawals. Soon after, the company's financial difficulties became clear, culminating in a bankruptcy filing. The fallout has left many users with significantly reduced access to their funds. Crypto lender Celsius Network received U.S. bankruptcy court approval for a restructuring plan that will return cryptocurrency to customers and create a new company.
What's Happening with Celsius Repayments?
The approved reorganization plan aims to transform the failed crypto lender Celsius Network LLC into a creditor-owned Bitcoin mining firm. This transformation is part of a broader proposal designed to partially compensate creditors. However, the amount users are expected to receive has been a point of contention.
Many customers who had funds tied up in Celsius will get back about $0.25 per CEL utility token. This amount is far below the initial value of their holdings, sparking outrage and frustration among Celsius users. The low repayment rate highlights the risks associated with investing in unregulated or unstable cryptocurrency platforms.
On Monday, August 14, bankrupt crypto lender Celsius Networks secured court permission to start polling its account holders over the new proposal of repaying an additional amount. The results of this polling could influence the final distribution plan and potentially affect the amount customers ultimately receive. This development underscores the ongoing uncertainty surrounding Celsius's repayment process.
Celsius's Restructuring: A New Chapter?
Celsius Network, the former cryptocurrency lender, ended its bankruptcy case on Thursday after a judge ruled in favor of its plan to become a creditor-owned bitcoin mining company, over a year after the company’s bankruptcy filing came amid an unstable period for cryptocurrency firms. The details of the plan are still unfolding, and the success of the new Bitcoin mining venture remains to be seen. The proposed transformation aims to generate revenue to further compensate creditors, but the timeline for achieving significant returns is uncertain.
The situation with Celsius serves as a cautionary tale for cryptocurrency investors. Due diligence, diversification, and understanding the risks associated with specific platforms are crucial for protecting investments in the volatile cryptocurrency market. The 1 de sept. de 2025 deadline for certain aspects of the reorganization is fast approaching, adding further urgency to the ongoing repayment discussions.