The federal judge who is currently presiding over the Celsius bankruptcy case has issued an order for the Celsius legal teams.
According to the latest reports, the judge has ordered the concerned teams at Celsius to return the funds of the customers. The order has been issued for Celsius to return more than $44 million.
Finally, after a long wait, the investors can rejoice that they will be getting the funds they had lost to Celsius.
Following the Terraform Network crash, the price of UST and LUNA ended up facing a major crash. This caused the investments of all major crypto firms to plunge.
Unfortunately, the Celsius Network had also invested heavily in the LUNA and UST tokens. As a result, the firm ended up facing a major financial crisis, and with no way of paying the customers back, it filed for bankruptcy.
The Judge Orders Celsius to Return $44 Million
Martin Glenn, the judge presiding over the Celsius Networks bankruptcy case in the United States has issued an order for the company.
According to the order issued on December 7, the company is required to return $44 million worth of cryptocurrencies to investors.
While issuing the order, the judge also talked about the entire matter. He stated that for him, the top priority is to ensure that the investors and the creditors are not unhappy.
They are to be returned their full amount and he wants to make sure it happens. He has made it crystal clear to the Celsius teams that they have to comply with the order as soon as possible.
Amount Held in the Custody Accounts
The custody accounts on the Celsius Network carry cryptocurrencies that are just a fraction of the total amount owed to the creditors.
The order that the judge issued for the Celsius Network to follow was after the stakeholders and the Celsius advisers had a meeting about the matter.
As a result of the meeting, both sides were able to come to an agreement. The agreement is that the custody accounts carry the cryptocurrencies that belong to the users/creditors and not to the platform.
Only Custody Assets are affected by the Order
It is to be clarified that only the custody assets are impacted by the order and they will be distributed among the creditors.
These assets belong to the users/creditors who only interacted with the custody program offered by the Celsius Network. The program does not cover the users who have been accessing the Earn accounts.
Told Amount Held in Custody Accounts in August
According to the data collected on August 29, the total amount held on the Celsius Network’s custody accounts was more than $210 million.
However, as the judge ordered the Celsius Network to release the funds back to the creditors, it was established that the custody accounts only have $44 million left.
Earn Accounts is Still Locked Up
Compared to the custody accounts, it is the Earn accounts at the Celsius Network that have the highest value.
The report suggests that the Earn accounts currently hold over $4.7 billion worth of funds belonging to the users/creditors. The particular accounts let the users deposit their funds and earn interest on them.
For the time being, the users do not have access to these accounts as they have been locked up by the Celsius Network.
Argument by the Celsius Network
The firm is now claiming that as per their terms and conditions, the owners of the earn accounts had given up the funds’ ownership to the Celsius Network.
A report published on December 5 has confirmed that the firm is now planning to sell $18 million worth of stablecoins. These stablecoins have reportedly been taken out by the Celsius Network from the Earn accounts.
In addition to the above order, the Judge has also issued an order for the company to manage a key employee retention program (KERP). The judge has reportedly approved $2.8 million for the KERP.