Celsius Network has reached agreements that could pave the way for the company to gain court approval for its plan to return assets to its customers and settle its bankruptcy.
The agreements stipulate that customers will be paid by the end of the year.
One of the deals resolves customer claims for fraud and misrepresentation claims by previous Celsius management by increasing recoveries by 5%. The settlement settles 30,000 claims seeking $78 billion in damages, according to court documents filed Thursday by Celsius' lawyers.
According to court documents, the settlements set the stage for Celsius's restructuring plan approval hearing before US Bankruptcy Judge Martin Glenn in October, and clients begin receiving payments in cryptocurrencies and other assets by the end of the year.
A second settlement resolves a dispute between the crypto company's two largest customer groups, those with deposits in high-interest accounts and others who take fiat loans. The group of borrowers had requested more advantageous treatment from high-interest account holders. Borrowers have gained some privileges, including being able to get back the crypto used as collateral upon repayment of their loans.
Celsius' restructuring plan proposes returning some of the customers' crypto and compensating them with shares of a new company that emerged from the crypto lender under the direction of a group of investors led by TechCrunch co-founder Michael Arrington. The new company will manage Celsius's Bitcoin mining business and other illiquid assets.
Celsius will seek court approval for the deals at a hearing on August 10.
*Not investment advice.
