A new lawsuit by Celsius Network demands the immediate repayment of all cryptocurrency holdings held by account holders who withdrew $100,000 or more in the ninety days before the network’s bankruptcy petition date.
The crypto loan startup Celsius Network has filed a petition with the US Bankruptcy Court to resolve its withdrawal preference exposure (WPE). On Thursday, January 9, the cryptocurrency lending site formally filed the paperwork with the court.
Account holders with WPE of $100,000 or more are being asked in the court file that targets major investors to pay a settlement to the bankrupt cryptocurrency firm or risk legal action.
Affected parties who have withdrawn the agreed-upon sum are subject to a number of further requirements laid forth in the settlement order.
Celsius said that creditors “who are not excluded parties, did not vote to reject the plan on any claims, did not opt out of the transfers under the plan, and who made the WPE settlement payment” will be emailed and told to settle their debt.
On the other hand, account holders whose WPE is $100,000 or less are not required to pay a settlement. Furthermore, an email detailing the settlement processes will not be sent to these persons.
All settlement payments are due by January 31, according to Celsius Network. Debtors are required to obtain 27.5% of the WPE by the due date, as stated in the application. Plus, customers have the option to pay for WPE with cash, Bitcoin (BTC), or Ethereum (ETH).
Celsius creditors who want to settle before the deadline will be released from all avoidance proceedings and given funds under the restructuring plan of the bankrupt crypto lending firm, as revealed in the court filing.
As a result, the Litigation Administration will manage the exposure of individuals who do not settle by the time, which might result in legal measures to reclaim the preference they obtained.
Since its WPE settlement deadline, Celsius Network has imposed several stringent requirements. The filing states that account holders must submit an election form no later than January 25 in order to begin settlement payments. On top of that, starting January 17, debtors will start accepting paperwork that has been filled out.
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