After a long wait of 263 days, Celsius has reopened distributable assets in certain custody accounts. Celsius blocked the feature of withdrawal to its customers in June 2022 after the bankruptcy was filed against it. The reason given by the company was “extreme market conditions,” but this caused outrage among its customers as they were not able to process their transactions.
Users started preparing to withdraw their funds when Celsius sent an email to them two weeks ago, asking them to submit a request to process their investments. For months, people had been calling for an answer after raising concerns about the company’s handling of the problem.
For those who are not aware, Celsius had more than $8 billion lent out to clients and almost $12 billion in assets under management as of May. It came into the limelight because of its higher-than-average interest rates on deposits to its clients.
According to some users, those who completed all mandatory proceedings before withdrawal received their amount within minutes after filing the claim. Others might face delays because of improper requests.
The delays in processing transactions are due to a lack of staff and application backlogs. Also, there are restrictions imposed on transaction limits. One user can only process 72.5% of their funds or $7,575. However, in January 2023, Celsius published a report in which eligibility to withdraw their funds was mentioned.
Amidst all uncertainties, the removal of the freeze is a welcome step for Celsius Custody’s clients because they may now process their transactions and make investment decisions. Yet, the incident has brought alerts to the dangers and complexities associated with preserving digital assets as well as the significance of selecting a reputable and trustworthy custodian.
Celsius Custody’s move provided a minute of relief to its customers after a long wait. The data is yet to come on how many people have received their funds. After this incident, people are hesitant to make investments in these types of custodians.
