The Celsius Litigation Administrator said that early withdrawals have unfairly benefited.
The administration overseeing now-defunct Celsius’s bankruptcy filed legal action on July 1 against users who withdrew their funds in the 90 days prior to the firm’s demise.
According to Business Wire, the Celsius Litigation Administrator filed complaints in the Southern District of New York against holders with more than $100,000 of withdrawal preference exposure (WPE). These are investors who managed to withdraw funds in the 90 days prior to when the firm began its bankruptcy proceedings–which took place between April 14, 2022 and July 13, 2022.
Over 1,500 account holders now face the potential of returning up to $100 million.
“Account holders who withdrew funds in the days leading up to Celsius’ bankruptcy have unfairly benefitted at the expense of other account holders since fulfillment of their withdrawal requests resulted in Celsius being unable to equitably fulfill other withdrawals,” said Mohsin Meghji, The Celsius Litigation Administrator.
Celsius was a lending platform which amid the turmoil affecting the market after Terra and Luna’s collapse, paused withdrawals and filed for bankruptcy in June 2022.
Users that might be affected by the legal action took to X to voice their concerns, saying they are being sued for their legitimate use of the platform and that the firm’s litigation team is allegedly using today’s market rates to recover funds, and not prices when the company collapsed.
During the month of June 2022, Bitcoin’s average price tag was $24,000, which is more than 50% less than what the asset is worth today.
One of the affected account holders, the pseudonymous med0x, wrote on X on July 5, “we are everyday people who used the platform as normal, not insiders, not bad actors, and because we happened to take our money off the platform 90 days before they declared bankruptcy they are trying to clawback all those funds plus more because they are suing for June 14, 2024 market rates, not 2022 rates.”
The Celsius Litigation Administration did not immediately reply to a request for comment from The Defiant.
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