Celsius achieves critical settlements in bankruptcy case.

Celsius achieves critical settlements in bankruptcy case.

The Rising Price of Celsius Network Token (CEL) and the Resolutions of Bankruptcy Issues

The price of Celsius Network token CEL experienced a significant surge of more than 12% on Saturday afternoon, making it one of the top gainers of the day. This surge in price coincides with Bitcoin’s current range near $30k, indicating a positive trend in the market.

Celsius Network, a crypto platform, recently reached two key settlements related to its bankruptcy proceedings and potential reimbursement of customer assets. These developments have encouraged traders and investors, leading to the rise in CEL token price. However, it is important to note that these gains, although modest compared to previous spikes, represent a decent recovery from recent lows.

Background on Celsius Network’s Bankruptcy Proceedings

Celsius Network has been embroiled in bankruptcy proceedings, with numerous account holders accusing the platform’s former management of fraud, misrepresentation, and other actions that allegedly harmed them. The Official Committee of Unsecured Creditors filed a class claim against Celsius Network, seeking justice for the affected account holders.

In court documents filed on July 20, it was revealed that Celsius has reached a settlement with the Official Committee of Unsecured Creditors. This settlement resolves all issues between the parties involved in the mediation and paves the way for the confirmation of the bankruptcy plan in October. If everything goes as planned, distributions to account holders could be made by the end of this year.

Customer Reimbursements and Crypto Asset Distribution

One of the crucial resolutions in the settlement is the potential reimbursement of customer assets. Account holders with interest-bearing Earn accounts could receive a percentage of their money in the form of crypto assets. Additionally, they may also be eligible for shares of the new company once the bankruptcy proceedings conclude.

The court document states, “This settlement, including the increased claim amounts, fully resolves all issues between the mediation parties relating to the Plan, will lead to the withdrawal of the adversary proceedings filed by the mediation parties, and will pave the way towards confirmation of the Plan in October and distributions to account holders by the end of this year.”

It is worth noting that approximately 30,000 account holders lodged total claims of $78.2 billion against the collapsed crypto lender. To address these claims, the management team has agreed to increase customer reimbursements by 5%. Account holders who do not opt out of the settlement will receive a claim amounting to 105% of their scheduled claim, which will supersede and extinguish any related Proofs of Claim previously filed.

The Benefits of Settlement and the Potential Consequences

While account holders have the option to reject the settlement, choosing this alternative could result in delayed distribution and potentially reduced recoveries. The proceedings associated with resolving the more than $70 billion of non-contract claims outside of the settlement are expected to be time-consuming and expensive. This would significantly harm creditors through delayed distributions and lower overall recoveries due to increased administrative expenses.

To examine the resolutions reached in the settlement, US Judge Martin Glenn will convene on August 10. This examination will determine the viability and fairness of the resolutions, ensuring that the interests of both account holders and creditors are considered.

In conclusion, the rise in the price of Celsius Network token CEL can be attributed to the positive developments in the bankruptcy proceedings. The settlements reached with the Official Committee of Unsecured Creditors provide hope for account holders seeking reimbursement of their assets. The potential distribution of crypto assets and the opportunity for involvement in the new company offer additional benefits for those affected. As the resolutions are examined by the court, the future of Celsius Network and its customers will become clearer.

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