Celsius prepares to reopen partial withdrawals for eligible users

Bankrupt crypto lender Celsius will be notifying eligible users about how they can start withdrawing assets in certain custody accounts, the firm announced on Feb. 15.

Celsius included the list of eligible users in its distribution schedule and will send emails and in-app notifications for the next steps, according to the announcement. However, Celsius has not yet set a date for when it will reopen withdrawals. The withdrawals will be restarted only for U.S.-based customers while international users have to await further court instructions.

As per the court order, the lender will return two categories of assets: “Pure” custody account assets, that is cryptocurrencies that were never part of its Earn or Borrow program, and “Transferred” custody assets — assets that were transferred from the Earn or Borrow program in the 90 days before Celsius filed for bankruptcy in July.

There is no limit on the amount of pure custody assets users can withdraw. However, only users with less than $7,575 worth of transferred custody assets will be able to withdraw while those above the limit remain ineligible for withdrawals.

At present, the court has authorized Celsius to allow eligible users to withdraw only 94% of their assets. The court will later decide if, when, and how the remaining 6% will be available for withdrawal. The court has also not decided when Earn users will be able to get their funds back.

Current and former employees of Celsius and their affiliates are ineligible for withdrawals as per the court order. Moreover, users that had active loans as of Dec. 20, 2022, and eligible users whose assets are less than the withdrawal transaction fees will not be able to withdraw assets. Users with aggregate transferred custody assets balance over $7,575 will also have to wait.

Celsius users need to update their accounts to withdraw

To reduce the risk of fraud and account takeovers, eligible Celsius users need to provide their updated know-your-customer (KYC) information — even if they had previously verified such information. Additionally, users also need to add a withdrawal address that will only become available after 24 hours.

Celsius also requires users to provide additional information about each withdrawal address, in accordance with the Travel Rule. The Travel Rule requires the collection and sharing of beneficiary and originator information with other financial institutions.

Therefore, users need to provide identification of whitelisted wallet addresses, confirm whether the withdrawal wallet belongs to the user or someone else, and information about the beneficiary crypto service provider.

Since Celsius is expecting high traffic once it reopens withdrawals, it can take more than 24 hours to process the withdrawal requests, it said.