Celsius to Reopen Withdrawals for Eligible Users: Are You Qualified to Reclaim Your Crypto?

The long wait might finally be nearing its end for Celsius Network users! After months of uncertainty following its bankruptcy filing, the crypto lender has announced that it’s preparing to reopen withdrawals for eligible users. This news brings a wave of relief to many who have had their assets locked on the platform. Let’s dive into the details of this development and understand what it means for Celsius customers.

What’s the Big News from Celsius?

On February 15th, Celsius officially announced that it will begin notifying users who are eligible to withdraw their funds from specific custody accounts. This is a significant step forward in the bankruptcy proceedings and offers a glimmer of hope for users seeking to regain access to their digital assets. According to their announcement, Celsius aims to grant access to a substantial portion of user holdings, specifically 94% of their assets. This initial phase focuses on users with assets in ‘custody accounts’.

Celsius has stated that they have already compiled a list of eligible customers as part of their distribution plan. If you are on this list, you should receive notifications via email and in-app prompts guiding you on the next steps. While the exact date for the resumption of withdrawals hasn’t been specified yet, the notification process itself indicates that the reopening is imminent.

It’s crucial to note that initially, withdrawals will be exclusively available to U.S. clients. Users outside the U.S. will need to wait for further court orders before they can access their funds. This geographical limitation is important to keep in mind.

Who Exactly is Eligible for These Withdrawals?

Eligibility for these initial withdrawals is based on the type of assets you held with Celsius. The focus is on two categories of custody assets:

• “Pure” Custody Assets: These are cryptocurrencies held in custody accounts that were never part of Celsius’ Earn or Borrow programs. Essentially, these were assets you were simply storing with Celsius.
• “Transferred” Custody Assets: These are assets that were moved out of the Earn or Borrow program within the 90 days leading up to Celsius’ bankruptcy filing in July.

Good news for those with “Pure” custody assets: you are expected to have access to your entire balance. However, for “Transferred” custody assets, there’s a threshold:

• Withdrawals Permitted: If your total “Transferred” custody assets are less than $7,575, you will be able to withdraw them.
• Withdrawals On Hold: If your “Transferred” custody assets exceed $7,575, you will unfortunately not be able to withdraw them at this time.

It’s important to understand which category your assets fall into to determine your eligibility in this initial withdrawal phase.

Why Only 94%? What About the Remaining 6%?

You might be wondering why users are only getting access to 94% of their eligible holdings. The court has currently only authorized Celsius to facilitate withdrawals for this percentage. The fate of the remaining 6% is still to be determined by the court at a later date. Similarly, the timeline for when users with funds in the Earn program will be able to retrieve their assets is also pending further court decisions.

So, while this is a positive step, it’s not the complete resolution for all Celsius users.

Who is NOT Eligible for Withdrawals Right Now?

Besides the asset type and the $7,575 limit, there are other categories of users who are currently excluded from these initial withdrawals, as per the court ruling:

• Current and Former Employees: Individuals currently or formerly employed by Celsius and its subsidiaries are not eligible.
• Users with Outstanding Loans: If you had outstanding loans with Celsius as of December 20, 2022, you are not eligible for withdrawal at this time.
• Low Balance Users: Users whose eligible balances are less than the withdrawal transaction costs will also be unable to make withdrawals. This is likely to avoid situations where the transaction fees would consume a significant portion or even the entirety of a small balance.
• High “Transferred” Asset Holders: As mentioned earlier, users with “Transferred” custody assets exceeding $7,575 are also on hold for now.

Make sure to check if you fall into any of these categories to understand your current withdrawal status.

What Steps Do Eligible Users Need to Take?

If you believe you are eligible for withdrawal, here’s what you should expect and prepare for:

1. KYC Update: Even if you’ve previously completed KYC verification, users with enhanced security features will be required to update their Know-Your-Customer (KYC) information. Keep an eye out for prompts to do this.
2. Withdrawal Address: You will need to provide a withdrawal address where you want to receive your cryptocurrency. Once you enter this address, there will be a 24-hour waiting period before you can initiate the withdrawal.
3. Travel Rule Compliance: Celsius is subject to the Travel Rule, which mandates the collection and sharing of information about the beneficiaries and originators of crypto transactions. This means you’ll need to provide additional details related to each withdrawal address.

To comply with the Travel Rule, you’ll likely need to:

• Verify Wallet Ownership: Confirm that the withdrawal wallet belongs to you.
• Provide Beneficiary Crypto Service Provider Information: Disclose details about the crypto service provider associated with your withdrawal wallet.
• Prove Wallet Ownership: You might need to further prove ownership of the withdrawal wallet.

Potential Delays and What to Expect

Celsius has cautioned that due to the anticipated surge in withdrawal requests, processing times may exceed 24 hours. Be prepared for potential delays as the platform manages the influx of users attempting to withdraw their funds. Patience will be key during this initial phase.

In Conclusion: A Step Forward, But the Journey Continues

The reopening of withdrawals for eligible Celsius users is undoubtedly a positive development in a long and challenging bankruptcy process. It signifies progress and offers a tangible step towards users regaining control of their assets. However, it’s essential to remember that this is just a partial reopening. Many users, particularly those with Earn accounts and those outside the US, are still waiting for their turn. The remaining 6% of custody assets and the future of Earn program funds are yet to be decided by the court.

For eligible users, the focus now shifts to completing the necessary KYC updates and preparing their withdrawal addresses. Stay vigilant for official communications from Celsius and be patient as the withdrawal process unfolds. While the road to full recovery may still be long, this announcement offers a much-needed beacon of hope for the Celsius community.