Celsius Network, a bankrupt cryptocurrency lender, intends to file a motion to extend the deadline for users to submit claims by another month.
The cryptocurrency community has grown impatient, noting that Celsius’ legal fees have continued to increase and are eating away at the lender’s estate. This may eventually affect the lender’s ability to reimburse clients.
Celsius announced on December 29 that it would seek to extend the current claims deadline from January 3 to early February.
Bankruptcy Court Awaits
The bankruptcy court is scheduled to hear the motion on January 10, and Celsius anticipates that the Jan. 3 deadline will be extended until at least that date.
During the claims process, creditors who believe they have a right to payment can file claims. Celsius’ creditors had filed over 17,200 claims as of December 29. On the other hand, Celsius’ creditors appear agitated, as the company’s administrative fees have continued to mount since its initial bankruptcy filing in July.
$53M In Legal Fees
According to a December 27 Financial Times report, the fees charged by bankers, lawyers, and other advisers in the bankruptcy case had already topped $53 million.
For example, a fee statement dated Dec. 15 from one of the law firms representing Celsius, Kirkland & Ellis, requested a fee of more than $9 million for work completed in September and October.
In comparison, Celsius has only set aside $44 million to return to customers. This money belongs to users who have only ever held funds in the Custody Program, and it represents a small portion of the $4.72 billion in user deposits held by Celsius.
The latest postponement in the proceedings has left some in the crypto community unimpressed, accusing it of being yet another “delay tactic.”
One user, for example, wrote: “Stop wasting time, stop extending, just go on with proceedings and give me my money back!!!!” Another simply stated: “Stop wasting time and my money.”
Possible Timeline For Reimbursement
In a Dec. 23 tweet, Simon Dixon, founder of global investment platform BnkToTheFuture and an active participant in the Celsius bankruptcy proceedings, stated that by the time users are able to get their funds back from Celsius, they should only expect to receive about half of what they put in.
On Oct. 20, Judge Martin Glenn appointed fellow judge Christopher Sontchi as a “fee examiner” at the request of Celsius, the U.S. trustee, and the unsecured creditors’ committee. His job is to negotiate and approve the fees set by the case’s lawyers and other professionals.
Celsius’ estate is also paying the fee examiner, with the most recent fee statement submitted on Dec. 21 requesting just under $20,000 for work done in November.
On July 14, 2022, cryptocurrency lender Celsius declared bankruptcy. As one of the companies affected by the Terra-Luna crash’s ripple effect, Celsius paid its DeFi loans to Aave, Compound, and Maker, resulting in the company’s bankruptcy.
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