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July 17, 2022

Celsius Network users are facing extended repayment waits

According to a recent report, Celsius customers may have to wait a long time to get their frozen assets on the struggling crypto lending site.

Remember that earlier this week, the company filed for Chapter 11 bankruptcy protection in a U.S. court. Reorganization plans may be put in place while the company remains operational. Although it showed a $1.2 billion imbalance in the accounts of its clients, it left consumers concerned about the safety of their money.

A group of legal specialists specialized in restructuring plans has cautioned investors to expect a lengthy wait while they wait for further information about the destiny of their money, according to a Reuters Friday story.

Lawyers who spoke with Reuters said the Chapter 11 procedure is likely to be protracted since there is no precedence for bankruptcy for major crypto firms, many lawsuits against Celsius are conceivable, and reorganization is very difficult.

Lawyer Daniel Gwen from Ropes & Gray in New York reiterated the likelihood of a lengthy settlement, saying that the process might take years to conclude and that there is a significant chance of several lawsuits being involved.

There is presently no clear roadmap for the treatment of clients against crypto lenders, according to the legal counsel, and as a result, the court’s decision to handle the situation is uncertain.

The bankruptcy legislation and bankruptcy courts’ treatment of bitcoin enterprises is, at best, a mystery. James Van Horn, a partner of Barnes & Thornburg’s Washington, D.C., office.

This is a restructuring plan that will likely be shaped by credit committees established as part of the procedures, which may also assert claims against the company.

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According to the court declaration, the corporation has assets of up to $4.3 billion and liabilities of up to $5.5 billion.

In the wake of a recent market drop, the business was one of the many crypto enterprises that had a serious liquidity issue, leading to the platform’s suspension.

According to Celsius CEO Alex Mashinsky, the business has made several bad asset deployment choices in the past.