Celsius Network Granted Court Approval to Process Customer Withdrawals and Issue Flare Tokens
The embattled crypto lender Celsius Network announced securing court approval authorizing it to process identified customer withdrawals. In particular, Judge Martin Glenn sitting in the New York Southern District Court, signed a petition by Celsius seeking to return funds remitted after it filed for bankruptcy. In particular, Judge Glenn delivered a favorable ruling on a petition seeking to refund funds received by the platform after bankruptcy filing on July 14, 2022.
Series of Approval Beneficial to Clients
Judge Glenn also approved the subsequent petition by Celsius Network to remit Flare tokens to the eligible XRP holders. The orders sought before the bankruptcy court on January 24 hearing to return funds to creditors whose digital wealth was trapped on the platform. Celsius aims to issue Flare tokens where the assets exceed a defined threshold.
The update by the crypto lender clarified that creditors constituting the majority would garner a single distribution comprising liquid crypto. Nonetheless, Celsius Network is yet to secure approval from the Trustee’s Office in the US. Its challenges trace to July 2022, when it filed for bankruptcy after suspending withdrawals, citing the crypto market meltdown.
The Tuesday court orders oblige Celsius to allow customers access to their funds remitted after the bankruptcy petition date. However, the Court observed that the customers would bear the gas fees and transaction costs.
Mandatory Approval from Creditors Committee
Eligible customers must seek approval from the committee of creditors. This requirement applies where the amount involved exceeds $40000. Also, the client had received an amount exceeding $200000 from the platform in the three months preceding the bankruptcy filing date.
The Court issued the final order that involved greenlighting the Flare token issuance to qualified creditors. The documents annexed to the motion filing identified Flare as a DeFi application using the XRP tokens. The order to greenlight the issuance follows the distribution of Flare earlier in January, ending a two-year wait. The order directed that holders of XRP during the December 2020 snapshot are entitled to the Flare token. The period was referenced since the blockchain ledger detailing the content was recorded then.
The approval of the Flare distribution to the Celsius account holders will benefit those holding XRPs during the snapshot. As an Institutional investor, Celsius is eligible to benefit from the 150 million tokens, where each price hovered around 4 cents on Wednesday.
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