Celsius Network is challenging a court ruling that denied its $444 million claim in the ongoing FTX bankruptcy case. On Tuesday, the defunct crypto lender filed a notice of appeal, seeking to overturn the decision made by Judge John Dorsey in December.
Celsius has been fighting to recover damages from FTX since 2024, initially seeking $2 billion. The claim stemmed from accusations that FTX’s “unsubstantiated and disparaging statements” played a role in the collapse of Celsius.
Later, the claim was revised, focusing on what it called “preferential transfers” that allegedly favored certain creditors. Despite these revisions, Judge Dorsey ruled in December that the claims were insufficient.
He found that Celsius failed to properly support its preferential transfer investigation and dismissed the amended claims due to procedural issues.
In the ruling, the judge also highlighted that Celsius had filed the amendments without proper permission and did not provide an adequate explanation for the delay. He noted that allowing the changes could disrupt FTX’s ongoing reorganization efforts.
This legal battle comes after Celsius began massive payouts to creditors in 2023. The company distributed over $2.5 billion to about 251,000 creditors, covering a large portion of the claims.
However, the controversy around Celsius’s founder, Alex Mashinsky, who pleaded guilty to fraud charges, adds another layer to the company’s struggles. Mashinsky faces a potential 20-year prison sentence, with his sentencing set for April 2025.
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