Celsius Rejects FTX Lawsuit Court Ruling, Seeks $444 Million

Celsius, the bankrupt crypto lender, has filed an appeal against a court decision that dismissed its claims for damages against FTX. The appeal is a critical step in Celsius’s fight to recover funds while navigating its bankruptcy process.

With billions initially at stake, dramatic legal twists, and its founder facing serious criminal charges, Celsius’s story is a revealing look at the risks and chaos of the crypto world. Can Celsius find a way out?

Celsius vs FTX: The Story So Far

Celsius initially demanded $2 billion in damages, accusing FTX of making false statements that worsened its financial troubles. Later, the claim was revised to $444 million, targeting “preferential transfers” that allegedly gave unfair advantages to certain creditors.

In December, Judge John Dorsey rejected both claims, stating that Celsius lacked sufficient evidence.

The judge also criticized the company for improperly amending its claims in July 2024 without court approval, noting that the changes were unrelated to the original allegations and could interfere with FTX’s restructuring efforts.

Paying Back Creditors

Despite these legal hurdles, Celsius has made progress in compensating its creditors. In August, the company returned $2.53 billion to over 250,000 creditors, covering about two-thirds of the claims. In November, it announced an additional payout of $127 million from its recovery funds.

These repayments briefly lifted the value of Celsius’s native token, CEL, which soared by 350% to $0.56 in September. However, the price later dropped to $0.1960, reflecting ongoing challenges for the platform.

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Alex Mashinsky in Trouble?

Celsius’s challenges have been compounded by the legal troubles of its founder, Alex Mashinsky. Last month, Mashinsky pleaded guilty to fraud and market manipulation involving the CEL token. He faces a potential 20-year prison sentence, with sentencing set for April 2025.

What Lies Ahead for Celsius?

By appealing the court’s dismissal of its claims against FTX, Celsius hopes to overturn the decision and strengthen its financial recovery efforts. However, this case highlights the legal and financial complexities of the cryptocurrency industry.

As Celsius works to regain its reputation and deliver fair outcomes for its creditors, the company’s future remains uncertain. The road ahead is not going to be easy.

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