Celsius files reopening of withdrawals for a minority of customers

Celsius requested that $50 million of the total $225 million held in the custody program and holdback accounts be released to the owners.

Beleaguered crypto lender Celsius Network yesterday filed a petition in the US bankruptcy court to allow customers with digital assets held in certain accounts to be removed.

There is a catch, however, because the motion will only apply to custodial and holdback accounts and custodial assets worth $7,575 or less.

Celsius has structured its deposit and hold accounts, which essentially serve as storage wallets, in a way that allows users to retain legal ownership of cryptocurrency.

This property is not, however, extended to assets held in accounts that offer annual crypto income or borrowing services (Earn and Borrow accounts).

Community response to the motion has been mixed, with creditors happy that Celsius Network has conceded funds held in its "custody program and holdback accounts likely constitute ownership of their assets".

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However, as BnkToTheFuture.com CEO Simon Dixon tweeted, the community feels the amount Celsius wants to release is well below what is fair.

#Celsius currently stating that those who were taken into custody 90 days prior to filing should be held. Custody is now $210 million and they want to release $50 million. They want to reserve the rest for recovery. They believe all funds earned belong to #Celsius NOTICE It's an illegal bank https://t.co/efGb3XPU2b

— Simon Dixon (Beware of Copycats) (@SimonDixonTwitt) September 1, 2022

As Dixon points out, only $50 million of the $210 million held by 58,300 users in deposit accounts is expected to be released, with all funds above $7,575 transferred from...