Celsius focused on preferential transfers and lowered its claim from its initial $2 billion demand to $444 million, but a court rejected both claims for procedural reasons.
Mohsin Meghji, Celsius’s litigation administrator, submitted the notice of appeal on December 31 with the intention of overturning Judge John Dorsey’s decision from December 18.
Now defunct cryptocurrency lender first brought a $2 billion lawsuit against the FTX bankruptcy plan, claiming that officials at FTX had made false claims that eventually undermined Celsius’s financial soundness and caused it to fail.
Later, the claim was lowered to $444 million, narrowing the action to allegations of preferential transfers that unfairly favored some creditors. Judge Dorsey rejected both claims due to procedural flaws and a lack of supporting documentation.
Since declaring bankruptcy in 2022, Celsius has been in and out of court. Meghji’s reform plan called for it to pursue legal action on behalf of creditors. Despite several court setbacks, the corporation is committed to using the legal system to get money back for its creditors.
As part of its restructuring procedure, the business has already disbursed about $2.53 billion to over 251,000 creditors. About two-thirds of qualified creditors and 93% of the total claim amounts were covered by this first distribution, which was finished in August. Celsius also aided creditors by announcing a $127 million dividend in November.
Alex Mashinsky, the creator of Celsius, is also dealing with some legal issues. Last month, Mashinsky entered a guilty plea to counts of fraud, including manipulating the price of Celsius. One of the charges against him carries a possible 20-year jail sentence, and his sentencing is set for April 2025.
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