Bankrupt crypto lender Celsius Network said on Friday it is not seeking to enforce payment obligations for outstanding loans during its chapter 11 proceedings and that borrowers do not need to repay such loans, Reuters reported. New Jersey-based Celsius said no interest or penalties will be assessed post loan maturity, in a filing at the U.S. Bankruptcy Court for Southern District of New York. Celsius filed for bankruptcy in July, with estimated assets and liabilities between $1 billion to $10 billion, with more than 100,000 creditors. The lender also listed a $1.19 billion deficit on its balance sheet and had about 23,000 outstanding loans to retail borrowers totaling $411 million backed by collateral with a market value of $765.5 million in digital assets, as of July 13 this year.
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In related news, Alex Mashinsky, the embattled founder and former CEO of Celsius Network, removed $10 million from the now bankrupt crypto lender weeks before Celsius halted customer withdrawals in June, the Financial Times reported, citing unnamed sources. Mashinsky, who resigned as CEO Sept. 27 Eastern time, withdrew the cryptocurrency in May. At the time, crypto markets were being roiled by the collapse of the Terra ecosystem, which saw $60 billion in value evaporate that month. Celsius is supposed to submit details about Mashinsky's transactions to the court in a few days as part of a wider financial disclosure by the company. A Mashinsky spokesperson said that the entrepreneur had disclosed to an unsecured creditors committee (UCC) in the bankruptcy proceedings that he and his family had $44 million in crypto frozen with Celsius following the withdrawal. Read more.
