A court has denied two legal actions brought forward by the crypto lending platform against FTX
Celsius, the collapsed cryptocurrency lending platform, has filed a notice of appeal against a court decision that disallowed its claims for damages from FTX. The appeal challenges a ruling by Judge John T. Dorsey, which rejected Celsius’ efforts to recover funds as part of its ongoing bankruptcy proceedings.
Celsius filed a Notice of Appeal against Judge Dorsey's ruling for FTX debtor
Elected for Appeal to be heard in the District Court
Facts
1) Celsius Filed a $2bn claim for disparagement before the bar date2) Celsius filed a $444m amended claim for a preference claim after bar… pic.twitter.com/evaBzMi5Lt
— Sunil (FTX Creditor Champion) (@sunil_trades) January 1, 2025
Initially, Celsius sought $2 billion in damages, accusing FTX of making “disparaging statements” that harmed its reputation and accelerated its downfall. The claim was later revised to focus on alleged “preferential transfers,” asserting that FTX provided special treatment to certain creditors, leading Celsius to seek $444 million in damages.
However, the court dismissed both claims in December, stating that Celsius’ original filings lacked sufficient detail to support the amended claims.
The appeal, filed on December 31 by Celsius’ litigation administrator Mohsin Meghji, disputes the court’s reasoning. Celsius argues that its original proofs of claim provided enough notice to address the alleged preferential transfers, even if they were not explicitly detailed at the time. The company maintains that the claims should meet the requirements of the Bankruptcy Code.
The court had previously ruled that Celsius’ amended filings, submitted in mid-2024, were improperly filed without seeking permission to amend. It also found the amendments unrelated to the original claims and untimely, adding that their acceptance would unfairly impact FTX’s reorganization efforts.
Celsius has been actively repaying creditors, having returned $2.53 billion to approximately 250,000 claimants by August 2024, representing 84% of owed assets. In November, the firm announced plans to distribute an additional $127 million from its litigation recovery fund. Despite this progress, the CEL token has experienced significant volatility, reflecting ongoing uncertainty surrounding Celsius’ legal battles and financial recovery.
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