Celsius Creditors Asked to Return Funds Withdrawn Before Bankruptcy – Bittime

Creditors of the Celsius company, which withdrew more than $100,000 from Celsius in the three months before it went bankrupt, were asked to return some of the funds or face legal action. This is based on a notification given to creditors.

Creditors Asked to Pay 2.75% of the Amount They Withdrawn from Celsius

Celsius' bankruptcy management has informed creditors that those who made large withdrawals in the 90 days before Celsius went bankrupt must return a portion of the withdrawn funds, or they will face legal action.

Account holders who had withdrawn more than $100,000 in the 90 days prior to July 13, 2022, the date Celsius declared bankruptcy, were required to return a portion of the funds they withdrew, according to a notice published on Tuesday.

The creditors involved will soon receive a letter instructing them to repay 27.5% of the amount they withdrew during the period, according to the document. If they follow these instructions, they will be eligible to receive future distributions according to the reorganization plan.

Also read: Celsius Stops Ether Staking: Impact on the Market and Future Ethereum Price Predictions

Users Still Have to Select the Available Options

Alan R. Rosenberg, a partner at the law firm Markowitz Ringel Trusty & Hartog, explained that this notice aims to give people who withdrew more than $100,000 in the 90 days before the bankruptcy filing date an opportunity to resolve this issue with the Estate for 27.5% of the amount withdrawn, without having to face legal action.

However, they must still choose to accept the reorganization plan and not opt out of the waivers in the plan.

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Does not apply to creditors who withdraw funds of less than 100 thousand US dollars

Rosenberg added that users who withdraw less than 100,000 US dollars do not need to return the money. However, they are also required to opt in to accept the reorganization plan and not opt out of the waivers contained in the plan.

He also stated that people who do not comply with the regulations will potentially be sued to return the preferences they have received.