Bankrupt crypto lender Celsius Network is allowing withdrawals of assets in certain custody accounts, according to a tweet on Tuesday. Eligible users will be able to withdraw all the funds in their accounts up to a certain limit, the company said in an earlier blog post. Withdrawals delayed due to massive backlog As per Celsius’ official statement, withdrawals were reopened for “Distributable assets in certain Custody Accounts.” Overjoyed Celsius customers have been sharing their withdrawal stories on social media including Twitter and Reddit.
The withdrawals resumed 263 days after they were first suspended in June last year. Customers who were eligible to withdraw received an email from the bankrupt lender, which asked them to submit requests for withdrawals following know-your-customer (KYC) completion. Details regarding withdrawal eligibility were shared by Celsius last month. The document stated that customers who had only held funds in Custody Accounts were eligible to withdraw funds, much to the dismay of Earn Account customers.
The eligible customers are allowed to withdraw 94% of their funds. The remaining 6% is contingent on the outcome of future court hearings. As for those who had transferred funds from Earn accounts to custody accounts, the withdrawal limit has been set at 72.5%, with withdrawals of no more than $7,575. Here’s what happened next Excited customers scrambled to get hold of their funds, leading to a considerable backlog of withdrawal requests. The backlog caused delays in withdrawals, which several users complained about.
Customers who whitelisted their wallets were reportedly able to get their withdrawals processed much faster. Users on Reddit reported a wait time of as much as 24 hours for USDC withdrawals. Some withdrawal requests have apparently been converted to support tickets by Celsius staff.
Celsius secured approval to process certain withdrawals according to several U.S. court orders in January. In February, Celsius published a list of names of users who could withdraw assets locked on the platform, with the company saying at the time it had permission from the U.S. Bankruptcy Court in the Southern District of New York to distribute 94% of each user’s assets. Eligibility for withdrawals was dependent on certain criteria such as that transfers had to be less than $7,575 when they were originally made, the February document said, and users had to have enough assets on the platform to cover any withdrawal fees.
Celsius paused withdrawals last June, citing extreme market conditions, and it filed for Chapter 11 bankruptcy protection a month later as it struggled with liquidity issues. The lender was hurt by the crypto winter in which billions have been wiped out of the crypto market in months, as several prominent companies such as stablecoin issuer Terra collapsed.
