Celsius Network, the bankrupt cryptocurrency lender, has filed an appeal challenging a court ruling that dismissed its $444 million claim against the defunct crypto exchange FTX.
In early 2024, Celsius sought to recover $2 billion from FTX, alleging that “unsubstantiated and disparaging statements” by FTX officials accelerated its collapse. The claim was later amended to $444 million, focusing on “preferential transfers” that allegedly favored certain creditors.
In December, Judge John Dorsey dismissed both claims, citing procedural shortcomings and insufficient evidence. He noted that Celsius’s original proof of claim only briefly mentioned a potential preferential transfer investigation, which was inadequate to substantiate the claim. Additionally, the amended claims were filed without seeking court approval and were not sufficiently related to the original claims.
On December 31, 2024, Celsius’s litigation administrator, Mohsin Meghji, filed a notice of appeal disputing Judge Dorsey’s ruling. The appeal is currently awaiting review in the District Court.
Despite its legal challenges, Celsius has made progress in repaying its creditors. In August 2024, the company distributed over $2.5 billion to approximately 251,000 creditors. In November, Celsius announced plans to disburse an additional $127 million to creditors from funds recovered through its litigation efforts.
The outcome of the appeal remains to be seen, as Celsius continues its efforts to recover funds amid ongoing bankruptcy proceedings.
