As a seasoned crypto investor with a decade of experience under my belt, I can’t help but feel a mix of emotions when I read about Celsius’ ongoing legal battle with FTX. Having been through numerous market cycles and seen countless projects rise and fall, I’ve learned to expect the unexpected in this ever-evolving world of digital assets.
Celsius’ initial claim for damages seemed like a long shot, but their persistence is commendable. However, the court’s decision to disallow both claims does raise some concerns about the clarity and specificity required when filing such claims. As an investor, I understand the importance of thorough documentation and timely action, especially in high-stakes situations like these.
The recent surge and subsequent dip in CEL’s price is a reminder that the crypto market is as volatile as ever. It’s almost as if my portfolio is on a rollercoaster ride, with every decision, development, or tweet potentially causing a sudden spike or plunge.
In the end, I guess it’s fitting that in the world of cryptocurrency, even the most straightforward legal matters can sometimes feel like solving a complex puzzle. And just when you think you’ve got it all figured out, the market throws you a curveball! As they say, if it wasn’t fun, they wouldn’t call it gambling!
In response to a court decision denying their claim for compensation from FTX, the cryptocurrency lending service Celsius has announced they will appeal this ruling in their ongoing bankruptcy proceedings.
Celsius has been attempting to recover approximately $444 million from FTX, initially asserting a $2 billion claim due to what they perceived as harmful comments made by FTX executives that allegedly hastened the downfall of Celsius. Later, they refined their claim, focusing on preferential treatment given to certain creditors over others in the form of “preferential transfers,” for which they demand compensation.
In December, Judge Dorsey dismissed both claims he received from Celsius, as the initial evidence provided by Celsius, consisting of just one sentence suggesting an investigation into potential preferential claims, was deemed inadequate for maintaining their preferential claims.
On December 31st, Mohsin Meghji, the legal representative overseeing disputes for Celsius Network and its related debtors, submitted an appeal notice concerning Judge Dorsey’s written decision and ruling.
Background on the claims
Sunil Kavuri, a proponent of FTX creditors, clarified in a January 2nd post that Celsius initially submitted a $2 billion claim for defamation before the deadline and later filed an adjusted claim for a preference claim worth $444 million after the deadline had passed.
In simpler terms, Celsius alleges that officials at FTX made unsupported and negative comments about their financial health and balance sheet in their initial complaint. Later, they demanded that $444 million transferred to FTX-related entities be returned as part of the bankruptcy proceedings, in an updated version of their original claim.
In simple terms, the court ruled that Celsius’s revised evidence presented in July 2024 was invalid because they failed to request permission to make these changes, the modifications were not closely tied to the initial claims, no justification was given for the delay in submission, and these amendments could negatively impact FTX’s restructuring process.
According to Celsius, the initial evidence provided was adequate for the debtors to be aware of potential avoidance claims, and at least, served as safeguard proofs that comply with the demands of the Bankruptcy Code, as stated in the filing.
Based on a report from August, Celsius paid back roughly $2.53 billion to about 250,000 lenders, which accounted for about 84% of the total assets they were obligated to repay.
By early December, the lending company announced plans to disburse approximately $127 million to creditors from their litigation recovery fund “promptly.
Originally, the Celsius platform’s native token (CEL) saw a significant increase of 350%, reaching $0.56 in September, immediately after a $2.5 billion repayment. However, since then, it has largely reversed those gains, dipping back below $0.20 and currently sitting at about 97.5% lower than its peak value as of the present moment.
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2025-01-02 06:56