Coin Realm reports:
On July 1st, the government overseeing the bankruptcy of the now-defunct Celsius initiated legal action against users who withdrew funds within 90 days prior to the company’s collapse.
According to Business Insider USA, the Celsius litigation trustee filed complaints in the Southern District of New York against holders with withdrawal preference exposures exceeding $100,000. These investors successfully withdrew funds within 90 days before the company commenced bankruptcy proceedings, which occurred between April 14, 2022, and July 13, 2022.
Over 1,500 account holders now face potential clawbacks totaling up to $100 million.
Celsius litigation trustee Mohsin Meghji stated, “Account holders who withdrew funds days before Celsius’ bankruptcy obtained an unfair advantage at the expense of other account holders, as the fulfillment of their withdrawal requests prevented Celsius from equitably completing other withdrawals.”
Celsius, a lending platform, suspended withdrawals and filed for bankruptcy in June 2022 amidst market turmoil following the collapse of Terra and Luna.
Users potentially affected by the lawsuit expressed their concerns to X, stating they are being sued for legitimately using the platform. It is alleged that the company’s litigation team is seeking to recover funds at today’s market prices, not the prices at the time of the company’s collapse.
In June 2022, the average price of Bitcoin was $24,000, over 50% lower than its current asset value.
One of the affected account holders, under the pseudonym med0x, wrote on X on July 5th, “We are ordinary people who used the platform normally, not insiders or bad actors. Because we happened to take our money off the platform within 90 days before they announced bankruptcy, they are trying to recover all these funds and more, as they are suing at the market rates of June 14, 2024, not those of 2022.”
The Celsius litigation management bureau did not immediately respond to The Defiant’s request for comment.