Crypto lender Celsius reacts to customer request to renew withdrawals held in custodial accounts.
Celsius, a cryptocurrency lending platform that filed for bankruptcy in July, has filed a motion to allow some of its customers to withdraw their funds.
According to the filing, issued on September 1st, the troubled crypto lender is planning to return funds to only those users that have Custody or Withhold Accounts.
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However, the criteria for customers to revoke their crypto assets don't stop there. Based on the filing documents, the customers will be eligible to withdraw their funds only if the total amount of assets held in these accounts are worth less than $7,575 and were not transferred from the Borrow and Earn Programs.
It is worth noting that Custody and Withhold Accounts function as storage wallets, which allow customers to have full ownership of their crypto assets.
The Celsius filing for the United States Bankruptcy Court states:
The debtors have identified significant cryptocurrency assets that they do not believe are property of their estates, and as to which the debtors do not believe that they have any colorable causes of action under applicable law. Accordingly, the debtors believe it is fair and appropriate to permit customers to withdraw those cryptocurrency assets at this time.
According to the data, around 65,000 users have Custody and Withhold Accounts. The accounts supposedly are worth around $225 million. However, after selecting users that meet the above-mentioned requirement, it turns out that Celsius will be returning only around 20% of funds held in Custody and Withhold Accounts.
Celsius filing comes just a day after, on August 31st, a group of 64 custodial-account owners asked the Bankruptcy Court for the Southern District of New York to obligate Celsius to renew withdrawals from custodial accounts.
The Celsius filing hearing will take place on October 6th.
