Key Takeaways:
- Appeal Against Ruling: Celsius has filed an appeal after a court rejected its $444M claim against FTX, citing procedural flaws and insufficient filings.
- Bankruptcy Battle: The dispute centers on “preferential transfers,” with Celsius arguing for funds to be returned to its bankruptcy estate.
- Market Impact: Celsius’ native token (CEL) has faced severe losses, trading 97.5% below its all-time high amid ongoing legal challenges.
Celsius, a collapsed crypto lending platform, has appealed a court ruling that disallowed its $444 million claim against FTX as part of its bankruptcy proceedings.
Initially, Celsius sought $2 billion in damages, alleging that statements from FTX executives exacerbated its financial troubles.
đź“° UPDATE: CELSIUS MOVES TO APPEAL RULING THAT DENIED $444M DAMAGES CLAIM AGAINST FTX
— BSCN Headlines (@BSCNheadlines) January 2, 2025
This was later revised to a $444 million claim, focusing on “preferential transfers” allegedly favoring certain creditors.
However, Judge John T. Dorsey dismissed the claims, citing procedural issues.
The court determined that Celsius’ original proof of claim lacked necessary details and that its later amendments were untimely and unjustified, potentially harming FTX’s reorganization.
Celsius filed a Notice of Appeal against Judge Dorsey's ruling for FTX debtor
— Sunil (FTX Creditor Champion) (@sunil_trades) January 1, 2025
Elected for Appeal to be heard in the District Court
Facts
1) Celsius Filed a $2bn claim for disparagement before the bar date
2) Celsius filed a $444m amended claim for a preference claim after bar… pic.twitter.com/evaBzMi5Lt
On December 31, Celsius’ litigation administrator Mohsin Meghji filed an appeal, asserting that its initial filings were sufficient to notify FTX of potential avoidance claims.
This move follows ongoing legal battles as Celsius works through bankruptcy proceedings, during which it has repaid $2.53 billion to over 250,000 creditors, covering 84% of assets owed, with plans for further distributions.
The case underscores the legal complexity surrounding Celsius and FTX.
Market reactions to Celsius’ developments have been volatile, with its CEL token experiencing dramatic price swings.
The appeal outcome could significantly impact both firms as they navigate their respective recoveries.
About The Author
Adam Morris, the co-founder of Crypto Head and a respected crypto expert, offers insightful commentary and analysis on cryptocurrency, NFTs, and the evolving digital landscape.
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