FTX bankruptcy case twists and turns: Celsius appeals court ruling for $4.44 billion claim again

Just as we ushered in 2025, the legal dispute between lending platform Celsius and FTX has heated up again. Earlier, Celsius accused FTX of making inappropriate remarks and favoring specific creditors, resulting in unfair fund allocation, which then led to Celsius triggering a financial crisis, demanding a claim of $2 billion. After the claim deadline, the amount was revised to $444 million, but both claims were rejected by the court. Celsius challenged the court's ruling again on 12/31 last year and filed an appeal.

The evolution of claims from 2 billion to 4.44 billion euros

Celsius, which went bankrupt in 2022 and owed more than $1 billion in debt, has demanded that FTX pay $2 billion during the bankruptcy process, claiming that FTX executives made "baseless and derogatory remarks" about Celsius' financial situation, accelerating Celsius' bankruptcy crisis.

Later, Celsius modified the claim amount to 444 million US dollars after the original claim deadline and accused FTX of transferring some funds to specific creditors before bankruptcy, violating the principle of fair distribution. However, this amended application was not approved by the court and was deemed unrelated to the original claim.

Celsius's appeal documents on 12/31. The court ruled to dismiss Celsius's claim.

The US court dismissed two claims from Celsius, citing reasons such as:

Program issue: The claim adjustment application submitted by Celsius has not been approved by the court.

Irrelevance: Correction application is not related to the original application.

Insufficient Explanation for Delay Reasons: Celsius failed to provide a reasonable explanation for the delay reasons of the submitted correction application.

Impact on FTX bankruptcy restructuring: the application may harm FTX's bankruptcy restructuring process.

Celsius rebutted that the original claim already included accusations against FTX and met the requirements of bankruptcy law, and that the court should not have dismissed it, and that it should recognize the legal effect of these accusations.

After the original claim deadline, Celsius resubmitted a claim for 444 million. Celsius appealed again.

Celsius' bankruptcy trustee, Mohsin Meghji, appealed again on 12/31 last year and attempted to overturn the court's ruling. Celsius stated that it will continue to pursue the related funds through legal means to protect the interests of its creditors.

As of August 2024, Celsius has repaid approximately $2.53 billion to about 250,000 creditors, accounting for about 84% of its total assets. In November 2024, Celsius announced that it would redistribute $127 million from the litigation recovery account to repay creditors.

Celsius's legal repayment document in August last year.

Celsius' platform coin CEL surged 350% after repaying $2.5 billion, reaching $0.56 in September last year. However, the price subsequently fell and is currently below $0.20, a decrease of about 97.5% from its all-time high.

CEL costs less than $0.20 today.

(Celsius founder Mashinsky pleaded guilty to a maximum 30-year sentence, spending 8 million euros a week on CEL fraud)

This article FTX bankruptcy case twists and turns: Celsius appeals against court ruling, re-appeals for a $444 million claim. First appeared in Chain News ABMedia.