Due to rising legal costs, Celsius would like to extend the time for filing claims.
Celsius Network, a defunct crypto currency lending platform, is to file a request to extend the deadline for consumers to submit claims by another month.
The crypto community is getting restless because of Celsius's mounting legal bills, which are draining the lender's fortune.
On December 29, Celsius tweeted (1) that it would petition for a two-week extension of the existing claims deadline, which is currently set for January 3.
It is expected that the bankruptcy court will hear the motion on January 10; therefore, Celsius predicts that the deadline will be postponed until at least January 3.
More than 17,200 Claims Filed by Creditors!
During a bankruptcy case, creditors who believe they are entitled to payment might do so through the claims process. Until December 29, almost 17,200 claims had been filed by creditors of Celsius.
Creditors of Celsius may be getting restless (2) because of the company's mounting administrative costs since it filed for bankruptcy in July. A total of $53 million had been spent on bankers', lawyers', and other consultants' costs by the time the bankruptcy case was reported in the Financial Times on December 27.
For example, on December 15, one of the law firms defending Celsius, Kirkland & Ellis, submitted a fee statement for services rendered in September and October asking for more than $9 million.
Currently, only $44 million has been set aside by Celsius for refunds to clients. This sum is a small fraction of the $4.72 billion in customer deposits maintained by Celsius and belongs to users who have never stored monies anywhere outside of the Custody Program.
Crypto Community Not Happy With the Handling of Celsius
Some crypto community members have expressed displeasure with the current delay in the proceedings, calling it a "delay tactic." One user tweeted (3):
"Stop wasting time, stop extending, just go on with proceedings and give me my money back!!!!"
Another person said:
"So the lawyers get millions but I wonder what us small fry folks get?"
In a tweet published on December 23, Simon Dixon, founder of the global investment platform BnkToTheFuture, who has been an outspoken critic of Celsius, warned users that even if they are successful in getting their money back from the company, they will only get back about half of what they initially invested.
"Prepare yourself for 50% in 6 months with #Celsius Chapter 11 to manage your expectations | Focus on your family over XMas & rebuilding in 2023."
On October 20, Judge Martin Glenn nominated fellow Judge Christopher Sontchi to be a "fee examiner" at the insistence of Celsius, the U.S. trustee, and the unsecured creditors' committee. He is responsible for settling on and ultimately approving the fees charged by the attorneys and experts involved in the case.
In addition, the fee examiner is being compensated by Celsius' estate, with the most recent fee statement being issued on December 21 and asking (4) for little under $20,000 for work performed in November.