Bankrupt Celsius Network will cancel pledges to distribute assets to creditors

According to Decrypt, bankrupt crypto lending company Celsius Network will cancel its existing Ethereum (ETH) collateral to ensure sufficient liquidity when distributing assets to creditors.

Celsius Network announced on Twitter that it has started reclaiming and rebalancing assets in preparation for asset distribution. The company stated that it will cancel the existing ETH collateral to offset certain costs incurred during the restructuring process. According to Nansen data, Celsius accounts for 32% of ETH awaiting withdrawal, approximately 206,300 ETH, with a calculated value exceeding $466 million at current prices.

Celsius filed for bankruptcy protection in July 2022 when the crypto market experienced a downturn due to Terra's collapse. In November 2023, a judge approved a customer repayment plan that would return 67% to 85% of creditors' investments, with approximately $20 billion worth of Bitcoin and Ethereum being distributed among the company's creditors.

Former CEO Alex Mashinsky was arrested in July 2023 and charged with seven counts including securities fraud, commodities fraud, and wire fraud. His trial is scheduled to begin on September 17th, 2024.