Customers

Celsius Custody customers finally begin withdrawals 263 days after freeze

Celsius users with funds held in its custody program have finally begun to withdraw funds, but users report delays due to a backlog of requests.

Some Celsius customers have reported being able to withdraw funds from the bankrupt crypto firm for the first time, some 263 days after the lender froze withdrawals in the lead-up to its bankruptcy filing.

According to numerous social media posts, as of March 2, certain customers who held funds in Celsius’ Custody accounts have been overjoyed that they were finally able to withdraw their funds from the lender.

Glad to be one of the few to get their money back in almost one piece. Hoping everyone else will receive theirs in due time

— richieroyce.eth (@Richie_Royce) March 2, 2023

Customers report they received an email a few weeks ago listing those who were eligible to remove their funds, before receiving another on March 2 noting withdrawals could be processed.

*An email sent from Celsius to eligible customers on March 2. Source:* *Twitter*

While some users who whitelisted wallets ahead of their withdrawal attempt received their funds within minutes, others pointed to large delays.

*Celsius customers discussing withdrawal processing times on Reddit. Source:* *Reddit*

A backlog of withdrawal attempts seems to have built up, however, with some claiming that withdrawal requests are being converted into support tickets that could take some days to process as a result of “too many requests and not enough staff.”

*A Reddit user claimed they were told their request could take days to process. Source:* *Reddit*

On Jan. 31, Celsius published details on who was eligible to withdraw, with customers who had only ever held funds in custody accounts able to currently withdraw 94% of their original funds.

The custody accounts were only available to United States residents. The withdrawals are restricted to these customers, much to the disappointment of customers with funds in other accounts offered by Celsius.

Custody account holders may yet be able to get back the other 6%, pending future court hearings.

Customers who had transferred funds from the earn or borrow programs to a custody account are apparently able to withdraw 72.5% of their funds at this point in time, up to a maximum of $7,575.

The lender had first announced they would be freezing withdrawals on June 13, citing “extreme market conditions,” before filing for bankruptcy on July 13.

FTX customers names will remain sealed for now, rules judge

The decision comes after a Jan. 8 filing by FTX’s lawyers, who argued that public disclosure could create an undue risk of identity theft or unlawful injury to FTX creditors.

The names of up to nine million FTX customers are set to remain confidential for at least three more months following the latest ruling in FTX bankruptcy proceedings.

The decision was reportedly made by Judge John Dorsey in the Delaware-based bankruptcy court on Jan. 11 in response to a 168-page filing by FTX on Jan. 8, which requested the court to withhold confidential customer information.

Judge Dorsey said that he remains “reluctant at this point” to disclose the confidential information, as it may put creditors “at risk,” despite increased pressure from several media outlets:

“We’re talking about individuals here who are not present – individuals who may be at risk if their name and information is disclosed.”

Days earlier, FTX lawyers argued “that disclosure of the information would create an undue risk of identity theft or unlawful injury to the individual or the individual’s property” and that the court should use its “broad discretion” under the U.S. Bankruptcy Code to protect those affected by FTX’s collapse.

In late December, a group of non-U.S. FTX customers also pushed the Delaware bankruptcy court to keep customer information private, arguing in a Dec. 28 joinder filing that public disclosure would cause “irreparable harm.”

Judge Dorsey’s decision does however run contrary to most bankruptcy proceedings where creditor information is disclosed — which is what happened in cryptocurrency lender Celsius’ bankruptcy proceedings in October.

The Delaware-based bankruptcy court hasn’t been as kind to FTX equity holders, having released a Jan. 9 document that disclosed the investors expected to be wiped out and the number of shares they held with FTX.

Among those included NFL legend and former FTX brand ambassador Tom Brady, his ex-wife Gisele Bündchen, tech entrepreneur Peter Thiel and Shark Tank investor Kevin O’Leary.

It appears that progress is being made though, with FTX reported to have already recovered $5 billion in cash and cryptocurrency, FTX attorney Andy Dietderich said in a Jan. 11 statement.

According to early bankruptcy filings in November, more than 1 million creditors were speculated to be involved, with $3 billion being owed to the 50 largest creditors alone.