According to a report by Wall Street Journal on Friday, Celsius Network has reached settlements that could pave the way for court approval of its plan to return assets to its customers and conclude its bankruptcy.
However, the settlements come after the company, one of the largest crypto firms catering to retail investors, filed for bankruptcy last year, marking one of the first significant collapses in the crypto industry.
The agreements would resolve customer claims over fraud allegations by raising recoveries by 5%, potentially settling a total of 30,000 claims seeking $78 billion. The settlements are expected to provide for distributions to customers by the end of the year. This development could serve as a significant milestone in the resolution of one of the most notable implosions in the crypto industry.
The details of the settlements have yet to be disclosed, and it remains to be seen how this development will impact the broader crypto industry and the regulatory landscape. As crypto lenders like Celsius Network continue to navigate legal and financial challenges, these developments will likely shape the future of crypto lending and the measures taken to protect retail investors.
Earlier this month, the Securities and Exchange Commission filed a lawsuit against Celsius and its former CEO Alex Mashinsky, accusing them of raising billions through fraudulent and unregistered sales, lying to investors, and manipulating the price of a native token. This lawsuit adds another layer of complexity to the ongoing legal challenges faced by the company.
A confirmation hearing on Celsius’ reorganization plan is set for October, and customers could start to see disbursements of crypto and other assets before the end of the year. While Celsius lawyers have argued that customers are owed no more than they had deposited, some users filed claims seeking damages for alleged misconduct by former management.