According to BSCN, Celsius Network, a well-known crypto exchange back in its days, is now fighting with the court to reopen its $444 million claim against FTX. The exchange argues that decision made by Judge John T. Dorsey regarding the initial claim and amendment should be considered sufficient and valid.
Background of the Dispute
Celsius Network rose to its glory in 2021 but went bankrupt in June 2022. After this bankruptcy, FTX expressed its interest in acquiring the bankrupt exchange but after seeing its financials, FTX denied to move forward with the acquiring process. Moreover, the exchange had $1.3 million locked in FTX contracts and $13 million in undercollateralized loans to Alameda Research.
Soon after, FTX filed for bankruptcy in November 2022, causing a ripple effect in the market.
Celsius and FTX Dispute and Ongoing Battle
The dispute began in the early days of 2024, when Celsius then made claims against FTX, seeking to recover $2 billion in damages. However, appellant later amended their claim to $444 million, as they were focusing on “preferential transfers”.
The court dismissed both the claims made by the appellant in December 2024, stating that there were insufficient details in appellant’s initial proof of claim and improper filing of amended claims without courts approval. But Celsius is not giving up yet, on December 31, 2024, the exchange filed an appeal arguing that the initial filings were sufficient and amendments should be considered valid and they wish to reopen the case to reclaim the damages.
Outcomes of the Proceeding
A successful appeal could lead to recovery of substantial funds, which will impact the asset distribution in both the cases but if the appeal is denied, it may set a precedent affecting future claims in similar disputes.
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