Celsius Bank Reaches Settlement Agreement to Compensate Customers
Celsius, a crypto bank and exchange platform, has reached a settlement agreement to compensate its customers who were affected by the company’s bankruptcy. Despite the company’s financial troubles, 30,000 investors will receive compensation in the form of company shares by the end of the year, according to The Wall Street Journal.
Giving Traders Affected by Celsius Bankruptcy the Compensation They Deserve
Celsius was a company that provided crypto loans and served as a crypto exchange platform. Crypto traders could deposit their tokens on Celsius and earn interest on them.
However, the company faced issues when it was revealed that it had made poor investments, and a significant portion of its assets disappeared with the collapse of the Terra ecosystem. On June 13, customers were no longer able to withdraw their funds, leaving many users without access to their money.
Currently, Celsius is undergoing a substantial reorganization and has reached settlements in court. Thirty thousand former customers, who had collectively sued the company for $78 billion, will be compensated with company shares.
CEO of Celsius Crypto Company Arrested
Only the plaintiffs in the lawsuits will receive compensation. Victims from the Netherlands and Belgium who did not take legal action will not be compensated. The settlements will provide compensation to 5% of the affected customers.
Celsius and its former CEO, Alex Mashinky, faced a slew of legal actions from various regulatory bodies, including the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Commodity Futures Trading Commission (CFTC). Mashinky was subsequently arrested.
However, Mashinky is now out on bail after entering into a special arrangement that allowed him to be released without having to pay bail. The FTC had sought a fine of $4.7 billion, but Mashinky was not required to pay it either. This arrangement allows the company to get its affairs in order and compensate the victims in the case at hand.
It’s worth noting that the agreement only covers the specific plaintiffs involved in the lawsuits against Celsius. Victims from other countries or regions who did not pursue legal action may not receive compensation.
In conclusion, Celsius bank has reached a settlement to compensate some of its customers affected by its bankruptcy. While this is a step toward resolving the situation, it’s important to recognize that not all victims will be included in the settlement. The case highlights the risks inherent in the crypto industry and the need for strong regulatory oversight to protect investors and ensure the stability of the market.