Celsius Custody Customers Finally See Relief: Withdrawals Begin After Months of Bankruptcy Freeze

For Celsius Custody account holders, the long wait is finally nearing its end. After a grueling 263 days since withdrawals were initially frozen, some users are reporting successful withdrawals from the bankrupt cryptocurrency lender. This marks a significant, albeit partial, step forward in the complex Celsius bankruptcy saga, offering a glimmer of hope to those who had funds locked within the platform.

A Sigh of Relief: Custody Withdrawals Are Happening

Social media platforms buzzed with excitement as Celsius Custody clients confirmed receiving their funds. The process, initiated after months of uncertainty following Celsius’s bankruptcy filing, began with emails sent out a few weeks prior, identifying eligible users. A follow-up email on March 2nd then officially signaled the start of the withdrawal process. For many, this news was a welcome change after a prolonged period of anxiety and frustration.

Here’s a quick rundown of what we know about the Celsius Custody withdrawals:

• Who is eligible? Initially, withdrawals are open to customers who held funds exclusively in Celsius Custody accounts.
• Withdrawal Percentage: Eligible users are reportedly able to withdraw 94% of their original holdings.
• Geographic Restriction: Currently, only residents of the United States with Custody accounts are eligible for these withdrawals.
• Mixed Account Holders: Clients who transferred funds from Celsius’s Earn or Borrow programs into Custody accounts are also seeing some access, with a reported 72.5% withdrawal allowance, capped at $7,575.

The Withdrawal Process: Smooth Sailing or Still Some Choppy Waters?

While the news of withdrawals is undoubtedly positive, the actual experience seems to vary. Some users who had previously whitelisted their wallets reported swift withdrawals, receiving their funds within minutes. This smooth experience is likely what many had hoped for after the long wait.

However, not everyone is experiencing such seamless transactions. Reports of delays and backlogs are also surfacing. It appears that the sheer volume of withdrawal requests is creating bottlenecks. Some users are finding their withdrawal requests converted into support tickets, with estimated resolution times stretching into days. The reason cited? “Too many requests and not enough employees” – a stark reminder of the operational challenges faced amidst the bankruptcy proceedings.

Key Takeaways on Withdrawal Experiences:

• Speed Varies: Withdrawal speeds differ significantly, ranging from minutes to potentially days.
• Potential Delays: Expect possible delays due to high request volume and limited resources at Celsius.
• Support Tickets: Be prepared for your withdrawal request to potentially become a support ticket, adding to the processing time.
• Whitelist Advantage: Users with whitelisted wallets may experience faster processing.

Why Custody Accounts First? Understanding the Nuances

You might be wondering why only Custody account holders are currently seeing withdrawals. This distinction is crucial and stems from the legal complexities of bankruptcy proceedings and the different types of accounts offered by Celsius.

Custody accounts were designed to hold users’ crypto assets in safekeeping, separate from Celsius’s operational funds and lending activities. This separation, legally speaking, strengthens the argument that these funds rightfully belong to the customers and should be returned. In contrast, funds in Earn and Borrow programs were often considered part of Celsius’s operating capital, making their recovery a more intricate and contested legal battle.

Custody vs. Earn/Borrow Accounts: A Simplified View

It’s important to remember that this is an ongoing process. While Custody account withdrawals are a positive development, they are not the end of the story for all Celsius customers. Those with funds in Earn and Borrow programs are still awaiting updates and resolutions through the bankruptcy court.

The Road Ahead: What’s Next for Celsius Customers?

While the 94% withdrawal for Custody account holders is a significant step, it’s crucial to remember that 6% remains outstanding. Future court proceedings will likely determine the fate of this remaining portion, as well as the recovery prospects for those with funds in Earn and Borrow accounts. The situation is still fluid, and ongoing developments are expected.

Key Dates and Events to Remember:

• June 13, 2022: Celsius announces withdrawal freeze citing “extreme market conditions.”
• July 13, 2022: Celsius officially declares bankruptcy.
• January 31, 2023: Celsius announces 94% withdrawal availability for Custody accounts.
• March 2, 2023: Withdrawals reportedly begin for some Custody account holders.
• Ongoing: Bankruptcy proceedings continue, impacting the future of Earn/Borrow account holders and the remaining 6% for Custody clients.

In Conclusion: A Partial Victory, But Continued Vigilance is Key

The commencement of withdrawals for Celsius Custody customers marks a significant milestone in a long and arduous journey. It offers tangible relief to a segment of users who have been patiently waiting for access to their funds. However, it’s equally important to acknowledge that this is not a complete resolution. Many Celsius customers are still in limbo, awaiting clarity on the recovery of their assets from Earn and Borrow programs, and the final outcome of the bankruptcy proceedings.

For those eligible for Custody withdrawals, this is a moment to carefully follow the instructions, manage expectations regarding processing times, and remain vigilant about any communications from Celsius or the bankruptcy administrators. For the broader crypto community, the Celsius saga serves as a stark reminder of the risks associated with centralized crypto platforms and the importance of understanding the terms and conditions of different account types. As the Celsius bankruptcy case continues to unfold, staying informed and prepared remains paramount.