The company, which had previously claimed that users had relinquished legal ownership of their cryptocurrency, is now willing to refund around $50 million to customers, and the decision has caused the CEL token network to appreciate.
Traders’ assessments of Celsius Network, CEL’s parent company, release some of the locked cash to its clients caused CEL’s price to skyrocket by about 50%.
CEL soared to an intraday high of $1.67 per token on Sept. 2 after hitting lows of $1.15 the day prior. Lower trading volumes, however, along with the token’s quick surge point to a lack of investor confidence in continued upward movement.
Celsius Network requested that its clients with “certain Custody and Withhold accounts should be able to withdraw the amount of digital assets owed to them” in a motion filed with the Bankruptcy Court.
Celsius was able to thrive with the help of its customers’ cryptocurrency deposits, which were used to fund loans on a wider scale in the cryptocurrency lending market.
However, the year’s market slump left a $2.85 billion hole in Celsius’s balance sheet, forcing the company to freeze its clients’ accounts, locking billions of dollars across more than a million accounts. Celsius submitted a Chapter 11 bankruptcy filing in July.
It’s encouraging to see Celsius Network be open to returning some Custody monies to customers. The $50 million provided, however, pales in comparison to the $210 million that the corporation actually owns.
The value of the cryptocurrency assets in Celsius’ interest-bearing Earn accounts was nearly $4.2 billion as of July 10, according to the court records. In other words, with unfavorable fundamentals still looming over the Celsius market, the 50% price rise in CEL now appears overextended.