The court filing said, "We believe the Custody Settlement is beneficial because it allows Custody account users that are not eligible for a distribution of Transferred Custody Assets or Pure Custody Assets to obtain a substantial distribution of their Custody balance."
Judge Martin Glenn ruled that Celsius’ Custody account holders can receive up to 72.5% of their crypto assets.
According to the court filing, users who agree with the terms of the settlement will only receive 36.25% of their deposited assets upfront. The remaining amount will be distributed on the effective date of Celsius’ chapter 11 plan or by the end of 2023.
The official document claimed that Custody account holders may receive more than 72.5% of their assets if the court later determines that they are eligible to clawback a higher percentage of their funds.
However, claimants who receive 36.5% of their assets will not be allowed to pursue further litigation. Celsius may deduct a fraction of these funds for users whose outstanding loans with the bankrupt lender have an LTV ratio below 80%.
According to developer Cam Crews,
“Those Custody members who wish to press for 100% may be subject to preference claims. Those who accept 72.5% settle these claims. Employees and insiders are ineligible for the Custody settlement.”
Judge Glenn had earlier ruled that Celsius’ Earn accounts were the property of the firm. Consequently, Celsius’ latest refund plan does not include the claims of Earn account holders.
Owners of Custody accounts will have 30 days to opt into the settlement. Investment firm NovaWulf Digital Management will sponsor the refund process.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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