Paxful will refund its Earn program users affected by the Celsius Network collapse in 2022
According to a tweet from firm CEO Ray Youssef on March 29, cryptocurrency marketplace Paxful will reimburse customers of its Earn program who were impacted by the Celsius Network failure in 2022.
Youssef stated, “I’ve personally taken action and will be refunding all impacted Paxful users,” indicating that money would become available in the platform’s wallet soon after.
On July 14, Celsius filed for Chapter 11 bankruptcy in the US, locking the assets of thousands of depositors onto the crypto lending marketplace. At that time, neither the business nor its CEO, Alex Mashinsky, made any public statements about whether depositors could anticipate receiving any portion of their money. User deposits accounted for $4.72 billion or the majority of Celsius’ liabilities, according to the bankruptcy petition.
Paxful has not yet made public the amount it is paying back to customers. Judge Martin Glenn determined on January 4 during a bankruptcy hearing that, in accordance with the terms of use of the interest-bearing Earn program, Celsius controls the monies therein, not the program’s depositors. On the choice, Youssef said:
“The collapse of Celsius hurt countless users and damaged trust in our industry. Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius. Another hit came when the courts ruled that Celsius Earn Account belonged to Celsius’ bankruptcy estate, not to its users.” Bankruptcy proceedings for Celsius are still ongoing.
The committee of unsecured creditors and a group of account holders recently adopted a settlement proposal, allowing the account holders to recover 72.5% of their cryptocurrency holdings. The bankrupt platform claimed that over 85% of Celsius customers would be able to reclaim almost 70% of their cryptocurrency assets in a February announcement that NovaWulf Digital Management will serve as a sponsor for its restructuring plan.
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