Celsius, a once-noted crypto lender based out of New Jersey, froze customer withdrawals in June of last year and subsequently filed for bankruptcy in July. At the time, Celsius claimed to have more than 1.7 million registered users and around 300,000 active users who had account balances of more than $100.
Celsius Unveils Reorganization Plans
A new update on the Chapter 11 bankruptcy has recently been published by the Celsius Network which provides an insight into the dealings and negotiations that took place with retail borrowers and creditors. It includes information about in-kind cryptocurrency returns, custody solutions for the CEL token, settlement of CEL pricing, creditor classes and taxation of return.
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The report details an in-depth analysis of the treatment of these in-kind crypto returns. Celsius Network has settled for the top two cryptocurrencies viz. Bitcoin and Ethereum for the reorganization plan. In addition, it treats these returns as a non-taxable event, unless the Internal Revenue Service (IRS) interrupts to make a specific declaration otherwise under section 1313(a) of the tax code. At the time of writing, Bitcoin’s price was trading at $28,373.
Users Withdrawing Below $100K Are Safe
According to the information obtained, retail consumers who withdrew an amount that was less than one hundred thousand dollars and agreed to the plan will not be subject to a clawback. Certain customers, on the other hand, who have “withdrawal preference exposure” between $100,000 and $250,000 can settle 27.5% of their funds in either US Dollars, Ethereum, or Bitcoin.
However, the litigation trust will investigate each individual case in which a withdrawal of more than $250,000 was made. Moreover, users having more than $5,000 in their accounts will not only be eligible to earn ownership shares in the new company, but they will also get payments from any remaining cryptocurrency that is available once smaller client accounts have been repaid.
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