- Celsius Network has received court approval to process certain customer withdrawals.
- Two orders were issued by a U.S. bankruptcy court.
- One order approves specific withdrawals and the other approves the Flare token airdrop.
Struggling crypto lender Celsius Network has secured court permission through multiple orders to allow the return of certain customer funds. The approvals come from the U.S. Bankruptcy Court for the Southern District of New York and were signed by Judge Martin Glenn.
One order authorizes Celsius to return funds that customers transferred to the platform after the company filed for Chapter 11 bankruptcy in July 2022. The second order permits Celsius to proceed with the planned Flare token airdrop to eligible Ripple (XRP) holders on its platform.
These orders followed a motion filed by Celsius’ legal team requesting authorization to return funds to creditors whose assets were locked above a specified threshold. Counsel stated that the vast majority of customers would instead receive a one-time distribution in liquid cryptocurrency.
While the broader recovery plan still requires review and potential approval from the U.S. Trustee’s Office and other regulators, the court’s permission to process targeted withdrawals will provide immediate relief to customers who qualify to reclaim funds.
How the Celsius withdrawals will work
Under the court orders, customers may withdraw crypto they transferred to Celsius after the Chapter 11 filing. Withdrawals will be processed net of any applicable gas fees or transaction costs.
Withdrawals above $40,000 will be subject to additional scrutiny: if the transferor received more than $200,000 from Celsius during the three months before the bankruptcy filing, committee approval will be required before the funds are returned.
In addition, XRP holders on the Celsius platform will be permitted to receive the Flare token airdrop. Flare, a DeFi protocol that distributed Flare tokens to accounts holding XRP, carried out the drop earlier this month for wallets holding at least one XRP. Based on the amount of XRP held by Celsius, the platform qualifies to receive 150 Flare tokens.
These developments mark a limited but meaningful step toward restoring access for some customers of Celsius. The approvals do not resolve the company’s bankruptcy proceedings in full, but they establish a mechanism to return certain assets and to distribute tokens from the Flare airdrop to eligible holders on the platform.