Bankrupt crypto firm Celsius was allowed to pay out millions in bonuses

Alex Mashinsky, founder and CEO of Celsius.
image alliance / ZUMAPRESS.com | Bruno de Carvalho

Bankrupt crypto firm Celsius has been cleared by the court to pay out $2.8 million in employee bonuses, Bloomberg reports.

The crypto lender, which is seeking to emerge from bankruptcy, will use the payouts to keep employees from firing.

Celsius is said to have sought court approval to sell $18 million of customer equipment to pay bills.

According to a Bloomberg report, bankrupt crypto lender Celsius has received court approval to pay out $2.8 million in bonuses to its employees so they don’t hold the company to competitors who are leaving. According to court documents, Judge Martin Glenn approved Celsius’ motion on Monday.

The crypto firm, which managed $11 billion in assets for 12 million clients in May, filed for bankruptcy after crypto prices crashed and entered Chapter 11 bankruptcy in July, when bankruptcy law kicked in. With a balance sheet deficit of 1.2 billion US dollars (1.14 billion euros), only 170 employees are said to remain, down from 370 in July, the company claimed in court, “Bloomberg” reports.

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Berlin crypto fintech Nuri slips into insolvency

After the Celsius bankruptcy, investors who had invested in the crypto-lending platform have faced financial difficulties. The Celsius collapse favored, among other things, the insolvency of the German crypto startup Nuri, which had almost 500,000 customers. German investors had also invested in Celsius via Nuri.

The bonuses should not exceed USD 75,000 (EUR 71,210) and are only available to ordinary employees with an annual salary between USD 25,000 and USD 425,000 (EUR 23,740 and EUR 403,520). Celsius employees are supposed to keep the business going while the company goes bankrupt, because the financial firm must submit a restructuring plan by February 15.

In an earlier court document, Celsius reportedly asked the court to restrict access to employee names, salaries and other classified information. The company claims that disclosing such data would make it more difficult for the company to maximize its assets. In addition, “workforce morale could be adversely affected” if employees found out certain information about their colleagues.

Also in a separate request, Celsius has sought approval to sell $18 million in customer assets to continue paying bills until the bankrupt company finds a way to repay creditors. The coins Celsius wants to sell are from interest-bearing customer deposits that were created before the crypto company collapsed. Celsius claims that customers have surrendered their ownership rights. Judge Martin Glenn disputes this because he decides who owns the coins, according to the Bloomberg report.

This article was translated from English by Amin Al Magrebi. You can find the original here.

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