As the Company’s Bankruptcy Cases Intertwine, Celsius Is Trying To Get $7.7 Million From Voyager’s Estate

In the past, Celsius failed to meet what seemed to be a deadline to lodge a claim based on its agreement with another cryptocurrency lender named Voyager.

While the judges continue to argue over the precise legal status of Celsius Network’s assets, the attorneys for the bankrupt lender Celsius Network are attempting to recoup $7.7 million from the estate of the competitor Voyager Digital.

According to documents that were submitted to a court in the Southern District of New York in the early hours of Wednesday morning, the United States bankruptcy code permits the “clawback” of transactions that took place up to three months before the company Celsius filed for Chapter 11 bankruptcy protection on July 13.

“Voyager maintained Earn accounts with Celsius, which earned significant rewards for its users,” the filing stated, citing Voyager transactions of $7.7 million between Celsius accounts, of which $5.9 million was withdrawn during the crucial 90-day period. The filing also stated that during this time period, Voyager had withdrawn $5.9 million from its Earn accounts. Celsius is able to get the bitcoin according to a provision in the Bankruptcy Code known as Section 547.

Celsius noted that other withdrawals and transfers could potentially be susceptible to challenge, but added that the sum was still minor in comparison to the overall pool of unsecured claims held by Voyager, which was $1.85 billion.

On July 5, Voyager Inc. had filed for protection from creditors under the bankruptcy code, and the deadline for filing claims against the corporation was October 3. Celsius is pleading for an extension of the deadline, stating that it has been too preoccupied with its own legal dispute, and that Voyager delivered its legal notice to an outdated address for Celsius’ U.K. subsidiary. Celsius is requesting that the time be extended.

Martin Glenn, who is in charge of winding up the Celsius estate, approved the sale of Celsius’ self-custody platform GK8 to Galaxy Digital on Tuesday. On December 8, Martin Glenn, who is in charge of the Celsius case, ordered that $50 million worth of cryptocurrency that was being held in Celsius’ “Custody” programme be returned to customers.

But Glenn must yet decide whether the funds from other types of Celsius accounts now belong to the company or its customers. These other types of Celsius accounts include the interest-bearing “Earn” account and the transitional “Withhold” account that Voyager uses.

According to a filing made on Wednesday, the process of preparing legal paperwork for the Celsius legal case “was exceptionally complex because it is one of the first ever crypto bankruptcies, and there is a dearth of precedence.”


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