freeze

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.

Crypto exchange Kraken freezes accounts related to FTX and Alameda

Kraken said it froze account access to certain funds “we suspect to be associated with ‘fraud, negligence or misconduct’ related to FTX.”

United-States-based cryptocurrency exchange Kraken has frozen the accounts associated with “FTX Group, Alameda Research, and their executives,” on its exchange after engaging with authorities.

In a Twitter post on Nov. 13, Kraken said the accounts were frozen “to protect their creditors” and added it “maintains full reserves” and other users’ funds aren’t affected, likely seeking to stamp out fears from users that the exchange might face liquidity issues due to the fund freeze.

Kraken has spoken with law enforcement regarding a handful of accounts owned by the bankrupt FTX Group, Alameda Research and their executives. Those accounts have been frozen to protect their creditors.

Other Kraken clients are not affected. Kraken maintains full reserves.

— Kraken Exchange (@krakenfx) November 13, 2022

A Kraken spokesperson told Cointelegraph that it had “actively monitored recent developments with the FTX estate” and “are in contact with law enforcement,” saying it froze account access to certain funds “we suspect to be associated with ‘fraud, negligence or misconduct’ related to FTX.”

“We will resolve each account on a case-by-case basis and may seek guidance from the Bankruptcy Court or trustee as appropriate,” the spokesperson added.

Kraken’s account freeze comes after crypto exchange FTX announced on Nov. 11 that FTX Group consisting of roughly 130 companies including its sister trading firm Alameda Research filed for Chapter 11 bankruptcy in the United States, with its founder, Sam Bankman-Fried, resigning as CEO.

It also follows a suspected hack on FTX that involved a Kraken account, Kraken’s chief security officer Nick Percoco said on Nov.12 that they are aware of the account owner’s identity and later gave an update that FTX would make a statement regarding the situation “and them utilizing funds from their verified [Kraken] account to complete this transaction.”

Regulators appear to be coming down hard on FTX and their executives amid the recent turmoil.

FTX is headquartered in The Bahamas and the country’s securities regulator on Nov. 10 froze the assets of FTX Digital Markets — the exchanges’ Bahamian subsidiary — and its “related parties.”

The Bahamian securities regulator on Nov. 12 denied instructing FTX to prioritize withdrawals of Bahamas-based users after the exchange stated on Nov. 11 that it was instructed by the country’s regulators to facilitate Bahamian withdrawals.

Meanwhile, FTX is now under investigation by the Royal Bahamas Police Force for possible criminal misconduct, according to a Nov. 13 report.