- Celsius, which declared bankruptcy in July last year, is looking to make its debtors whole again.
- The bankruptcy court allowed the use of BTC and ETH as cryptocurrencies to swap their altcoin with.
- While Celsius is bouncing back, the company it went bankrupt after - Three Arrows Capital - is still struggling to reclaim $1.3B from its co-founders.
The crypto market has noted a huge amount of loss this year, but the warning signs came in mid-2022 when Celsius, among others, went bankrupt.
Led by the now-bankrupt cryptocurrency hedge fund Three Arrows Capital, the company’s downfall marked the first contagion the crypto market experienced in a long time. However, by the looks of it, Celsius debtors might be getting an opportunity to miraculously recoup their losses.
Celsius debtors get a chance to recover losses
Celsius debtors, as per a bankrupt court’s order on June 30, can begin to cash the altcoins sitting in their wallets for Bitcoin and Ethereum. Starting July 1, these users will get the opportunity to claim back their assets but only by swapping them for two of the biggest cryptocurrencies in the world.
The move came after the New York bankruptcy court passed the motion Celsius had been fighting for a long time. The company has been holding regular talks with the Securities and Exchange Commission (SEC) to ascertain that the process is legitimate.
Celsius debtors becoming whole would send out an important message to users impacted by the recent spree of bankruptcies in the crypto industry.
Another significant example is FTX which, despite owing its debtors $8 billion, is also exploring ways to make them whole again. One option might be to make them stakeholders in the FTX exchange post its relaunch.
This, however, may not be true for some others in a similar situation. Three Arrows Capital (3AC) liquidators Teneo are claiming $1.3 billion from the founders of the hedge fund.
According to a report from Bloomberg, the liquidator claimed this amount from Su Zhu and Kyle Davies, citing the collapse of the fund and the losses it incurred during this period.
Even though more than $65 million worth of cash and assets have been secured by the liquidators as of today, they still have a long way to go, as the company’s balance sheet represents a $3.5 billion hole.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.