In a recent development concerning the embattled crypto lender . Information from court filings on 20th July revealed that the network reached two settlements, which might allow the return of assets to customers and signify the end of its bankruptcy proceedings.
Interestingly, the two different settlements address $78.2 billion in unsecured claims. One settlement plan proposes managing accusations of fraud and misrepresentation by increasing customers’ recoveries by an attractive 5%. Nevertheless, these account holders also maintain their rights to chase individual claims against if they choose to opt out of the settlement.
Under the second settlement, customers with funds in Celsius’s interest-bearing Earn will find a relief plan. Customers who borrowed crypto funds have the chance to receive a part of their funds in crypto assets, coupled with a compensation in shares of the new firm rising from the bankruptcy proceedings.
It seems these steps might bring about a long-awaited closure. However, scepticism laces the whole process, not only in handling glaring $78.2 billion in unsecured claims, but also in securing the interests of the different stakeholders involved.
It is important to remember, it was a year ago when its former CEO, Alex Mashinsky, got arrested under criminal and civil charges of fraud and intent to manipulate the market. Besides, the Securities and Exchange Commission lodged a lawsuit against Mashinsky and other Celsius executives for raising billions through unregistered and fraudulent offers, as well as selling crypto asset securities. To make matters worse, the Federal Trade Commission announced civil cases against the former CEO and issued $4.7 billion in fines to the lending platform for allegedly squandering billions in user deposits.
While the news about the settlement brings some hope for a resolution, it elicits questions on the transparency and accountability of startup ventures in the blockchain space. Many stakeholders in the crypto space will keenly watch how the unfolding events play out, as they will potentially set a precedent for the future of regulation in the industry.
On a broader perspective, this saga begs the question of how well we are preparing for the future of blockchain and cryptocurrency. This case is a stark reminder of the importance of stringent regulations, transparency, and protection for investors. Therefore, necessary checks and measures need to be set up to avoid similar scenarios in the future. As the blockchain future hangs in the balance, the fundamentals of good business remain: trust is the currency, and it is hard to earn but easy to lose.
Source: Cointelegraph
