Insolvent lender Celsius’ attorneys are attempting to recoup $7.7 million from competitor Voyager’s estate while judges disagree over the exact legal standing of Celsius’ assets.
The early hours of Wednesday morning saw paperwork filed in a court in the Southern District of New York regarding transactions that occurred up to three months before Celsius filed for Chapter 11 bankruptcy on July 13.
According to the complaint, Voyager “kept Earn accounts with Celsius, which garnered considerable incentives for its users.” It did this by mentioning Voyager transactions between Celsius accounts totaling $7.7 million, of which $5.9 million was withdrawn, during the important 90-day period. The Bankruptcy Code’s Section 547 enables Celsius to recoup that cryptocurrency.
Celsius noted that more withdrawals and transfers would possibly face legal challenges, but he also noted that the amount was still insignificant compared to the $1.85 billion worth of unsecured claims that Voyager had in total.
Voyager itself declared bankruptcy on July 5, and claims against the business had to be submitted by October 3. However, Celsius is pleading for a deadline extension, claiming that it was too preoccupied with its own legal proceedings and that Voyager sent its legal notice to the U.K. division of Celsius at an outdated address.
Martin Glenn, who is in charge of the Celsius case, ordered the return of $50 million in cryptocurrency stored in the company’s “Custody” program to consumers on December 8 and allowed the sale of Celsius’ self-custody platform GK8 to Galaxy Digital on Tuesday as he closes out the estate.
Glenn must however still determine if the money in other Celsius accounts, such as the interest-bearing “ern” and temporary “Withhold” accounts used by Voyager, now belongs to the company or its customers.
The Wednesday filing stated that creating the documentation for the Celsius legal case “was particularly difficult given that it is one of the first crypto bankruptcies, and there is a dearth of precedence.”
