The crypto lender has officially filed an appeal against a court ruling that tossed out its $444 million claim in the ongoing FTX bankruptcy case.
This appeal wants to overturn December’s decision made by Judge John Dorsey, who found Celsius’ claims lacking due to procedural issues and insufficient evidence.
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Give me the money!
Originally, Celsius claimed that the exchange’s “unsubstantiated and disparaging statements” played a role in its downfall.
After some back-and-forth, they revised their claim down to $444 million from $2 billon, focusing on “preferential transfers” that allegedly gave some creditors an unfair edge.
In his December ruling, Judge Dorsey pointed out that Celsius’ initial claims were pretty flimsy, just a single sentence about investigating potential preference claims didn’t cut it.
He also ruled that the amended claims, filed in July 2024, were improper because Celsius didn’t get permission to make those changes, plus, he felt the amendments were unrelated to the original claims and that Celsius didn’t explain their delay well enough.
Dorsey warned that allowing these changes could mess with FTX’s ongoing reorganization efforts.
Legal drama
Celsius argues that its original claims were enough to alert debtors about potential avoidance claims. They believe these filings met the Bankruptcy Code requirements and should have been sufficient to keep their position intact.
But the court wasn’t having it, emphasizing procedural and evidentiary shortcomings in Celsius’ submissions.
On December 31, Mohsin Meghji, the litigation administrator for Celsius and its affiliated debtors, officially appealed Judge Dorsey’s decision.
Celsius insists that dismissing its claims was unjustified and is pushing for a reversal.
Celsius works hard to repay its creditors, because since 2023, they’ve dished out over $2.5 billion to around 251,000 creditors, covering about 84% of what they owe.
In November 2024, they even announced plans to distribute an additional $127 million from their litigation recovery account.
Token performance
CEL saw a wild ride, surging 350% in September 2024 after hitting a repayment milestone but has since dropped below $0.20. That’s a 97.5% decline from its all-time high, but I guess it’s understandable.
Celsius is also dealing with some serious scrutiny due to its founder Alex Mashinsky’s legal woes. He pleaded guilty to fraud charges and is set for sentencing in April 2025, facing up to 20 years behind bars.
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