In a significant development for the crypto industry, a U.S. judge has approved a settlement that will allow Celsius Network to return 72.5% of crypto assets to its users who were affected by a breach in November 2020.
Celsius Network, a cryptocurrency lending and borrowing platform, suffered a hack last year, resulting in the loss of more than $50 million worth of cryptocurrency assets. The company’s users were left reeling as their funds were drained from their accounts, and Celsius had to shut down its services temporarily to investigate the breach.
Following the investigation, Celsius implemented additional security measures and vowed to compensate its users for their losses. The company proposed a settlement in December 2020, which involved returning 80% of the affected crypto assets to its users. However, the settlement was challenged by some Celsius users who argued that they were entitled to 100% of their lost funds.
After several months of negotiations, the two sides agreed to a compromise settlement, which was approved by a New York judge last week. Under the new settlement, Celsius will return 72.5% of the affected crypto assets to its users, which is a reduction from the original proposal but still a significant amount.
The settlement will be paid out in two tranches. The first tranche, consisting of 25% of the affected crypto assets, will be paid out within seven days of the judge’s approval. The remaining 47.5% will be paid out in six monthly installments, starting from April 15, 2023.
Celsius Network’s CEO, Alex Mashinsky, welcomed the settlement and thanked the affected users for their patience during the long negotiation process. He said that the company was committed to maintaining the trust and confidence of its users and would continue to prioritize security and transparency.
The settlement is a significant milestone for the crypto industry, as it sets a precedent for how cryptocurrency platforms should handle security breaches and compensate affected users. It also highlights the need for better regulation and oversight of the industry to prevent such incidents from occurring in the first place.
The Celsius Network hack was one of several high-profile security breaches that occurred in the crypto industry last year, highlighting the vulnerability of these platforms to cyberattacks. The incident underscores the importance of implementing robust security measures and adhering to best practices to safeguard user funds.
In conclusion, the approval of the Celsius Network settlement is a positive development for the crypto industry and its users. It sends a strong message to other platforms that they must prioritize security and compensate users for any losses resulting from security breaches. It also highlights the need for better regulation and oversight of the industry to ensure the protection of user funds and prevent such incidents from occurring in the future.