Bankrupt crypto lender Celsius Network is pursuing the return of over $2 billion withdrawn by significant clients shortly before its bankruptcy announcement in July 2022.

The move, orchestrated by a committee formed during the company's Chapter 11 proceedings, is part of its restructuring efforts. It targets individuals who withdrew substantial sums from the crypto platform to avoid potential legal issues and ensure equitable distribution of remaining assets among creditors.

Specifically, the effort focuses on accounts that withdrew more than $100,000 during the critical period leading up to the bankruptcy filing. This action, aiming to replenish funds available for creditor repayment, is set to impact around 2% of Celsius users responsible for withdrawing approximately 40% of the platform's assets within the 90 days before bankruptcy.

The legal framework of bankruptcy law allows entities like Celsius to reclaim funds dispensed before filing for bankruptcy, irrespective of the recipients' innocence, to ensure fair treatment for all creditors. The initiative offers these users a chance to settle at a favorable rate to avoid potential litigation, emphasizing correcting imbalances caused before the bankruptcy filing.

This settlement strategy simplifies the recovery process, providing a practical alternative to litigation by allowing account holders to return a portion of the withdrawn assets, which have since increased in value.