Celsius Network gets approval to process certain customer withdrawals
- Celsius Network has received approval to process some customer withdrawals.
- Two orders have been issued by a US bankruptcy court
- One approving certain withdrawals and the other approving the Flare token airdrop.
Embattled crypto lender Celsius Network has received approval through several court orders allowing the lender to process certain customer funds withdrawals.
One approval signed by US Bankruptcy Court for the Southern District of New York Judge Martin Glenn authorizes the lender to return funds transferred to the platform after the company filed for Chapter 11 bankruptcy in July 2022. The other approval authorizes the lender to go ahead with its planned Flare token airdrop to eligible holders of Ripple (XRP) on the platform.
The court orders follow a case filed by Celsius layers in court on Tuesday requesting the lender to be allowed to return funds to creditors with locked assets above a certain threshold. The attorneys said that other customers, who make up the majority of the lender’s customer base, would receive “a one-time distribution in liquid crypto.”
Although the plan by the attorneys is yet to receive approval from the US Trustee’s Office and other regulators, the court orders allowing the processing of specific withdrawals will be a huge relief for those who will get their funds back.
How the Celsius withdrawals will work
According to the court orders customers will be allowed to withdraw any funds they transferred in form of crypto to the cryptocurrency lender after it filed for Chapter 11 bankruptcy. The withdrawals will be “net of any gas fees or transaction costs.”
Additionally, if the amount exceeds $40,000 and the transferor received over $200,000 from Celsius during the three months leading up to the bankruptcy filing, the withdrawal will require to be approval by the appointed committee of creditors.
XRP token holders on the Celsius platform will also be allowed to receive their Flare token airdrop. Flare, a decentralized finance (DeFi) application that uses XRP tokens carried out Flare tokens distribution earlier this month to XRP token holders who held at least one XRP token. Celsius itself qualifies to receive 150 Flare tokens going by the amount of XRP tokens it holds.
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