Celsius, a cryptocurrency lending platform currently navigating a bankruptcy process, has officially announced its decision to appeal a judge’s ruling that dismissed its claims for damages against FTX. The company has been pursuing the recovery of substantial sums from FTX, originally alleging damages totaling $2 billion due to misleading statements made by FTX executives, which Celsius contends contributed to its downfall.
Over time, Celsius revised its claim, narrowing its focus to “preferential transfers” it argues were made to particular creditors at the expense of others, now seeking $444 million as restitution. However, Judge Dorsey ruled against both claims in December, stating that the documentation presented by Celsius did not adequately convey the necessary details to support such claims.
On December 31, the litigation administrator for Celsius and its associated debtors filed a notice of appeal regarding the judge’s decision. The case has drawn attention, particularly when it was noted that Celsius initially issued a $2 billion disparagement claim before the filing deadline, later amending it to the $444 million request after the deadline had passed.
Judicial scrutiny found that Celsius’s amended claims were improperly filed, as they did not sufficiently relate to the original claims and lacked a valid reason for the delay in their submission. Additionally, the amendments were determined to negatively affect FTX’s restructuring efforts. Celsius’s position is that their initial filings were adequate to inform the debtors of their claims related to avoidance actions, and that they functioned as protective proofs in accordance with bankruptcy regulations.
Recent court developments indicated that Celsius has repaid around $2.53 billion to approximately 250,000 creditors, fulfilling about 84% of its outstanding debts. Additionally, the company signaled its intent to distribute another $127 million to creditors from its litigation recovery account imminently. The Celsius native token experienced significant fluctuations, enjoying a surge in value after the substantial repayments but has since decreased considerably from its peak.
