Celsius Case Experts Yet to Understand Cryptos Ruling Under US Bankruptcy Code

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Celsius Network's repayment options to creditors suggest either accepting «cash at a discount» or remaining long-term crypto holders, but this is yet to be decided as the crypto lender's bankruptcy case carries on.

Celsius filed for court protection against bankruptcy last week. The crypto lender's case involves billions of dollars of customers' assets tied with the platform; however, experts are yet to find a solution as they are puzzled about how cryptocurrencies should be treated under the US bankruptcy code.

According to Bloomberg, Celsius customers will be represented by an official voice from a committee of creditors in the case once the panel is appointed by the office of the US Trustee — an arm of the US Department of Justice that oversees corporate bankruptcy cases.

The crypto lender suggested, via a slide presentation posted on the company’s bankruptcy website, for its part that it may give customers “the option, at the customers’ election, to recover either cash at a discount or remain ‘long’ crypto.”

The company also said on the opening day of the Chapter 11 bankruptcy hearing on July 17 that it promises not to force customers to accept repayment they may be owed in fiat currency. 

Patrick Nash, a bankruptcy lawyer for Celsius, said some users could be interested in receiving cash recoveries, but a «substantial majority» will prefer to fight through the crypto winter by remaining «long crypto.»

However, Celsius' bankruptcy case rides on uncertainty as even veteran US Bankruptcy Judge Martin Glenn, overseeing the bankruptcy case in Manhattan, is fighting to grapple with several fundamental questions. Glenn must find a way to see how he can crack this puzzle of a case involving a firm that bills itself as a