Who’s Eligible to Get Their Crypto Back From Bankrupt Celsius?

Celsius users rejoice. Well, some of them.

Today, a now-bankrupt crypto lender announced that certain “qualified users” can expect to withdraw their funds soon.

The court filing indicates that “on or about February 15, 2023”, this group of users will be notified of their eligibility as well as begin a process to withdraw their funds. This process involves updating the user’s address and providing information according to KYC and AML regulations.

Importantly, these users are also only able to withdraw 94% of their trapped crypto.

But what does “qualified user” mean?

Well, Celsius says, it’s complicated and depends on a few key conditions around which account the user keeps, for how long, and in what amount.

Let’s destroy it.

Defining a ‘proper’ Celsius user

Back in December, a bankruptcy court judge ordered Celsius to return about $44 million in unnamed cryptocurrency.

Users who deposit their funds in the Celsius “custody program” or in the “hold account” can get 94% of their money back if the funds are “only ever in” the custodial program or transferred to the custodial program from earning interest or borrowing the account within 90 days before the petition, and the value is less than $7,575.

Other users who qualify include those who send unsupported crypto to Celsius, but are also owned by debtors.

If a user checks all of those boxes, they are entitled to 94% of whatever is left in their account.

Some users may fall into this category, but the filing also indicates that users must account for each transaction and gas fee for their withdrawals. If those fees are higher than the holdings in the qualifying account, they won’t get their money back.

And, finally, the bankruptcy court will determine at a later date that Celsius can distribute the remaining 6% to users.