Bankrupt Celsius seeks settlement with Dutch crypto platform Coinmerce
The bankrupt crypto bank Celsius has filed a claim against 2500 former customers, including Coinmerce. Coinmerce states this claim has no value to them. Way before Celsius‘s bankruptcy in 2022, Coinmerce withdrew $10.7 million in assets from Celsius to protect its users. Now, two years after its bankruptcy, Celsius is demanding the return of these crypto assets, which have since doubled in value, through a U.S. 'clawback' procedure. Coinmerce has rejected an earlier settlement offer of $1.4 million, as Celsius still owes $2.5 million to Coinmerce.
Following the collapse of the stable coin UST (TerraUSD) on May 9, 2022, Coinmerce reassessed its exposure to third parties. Subsequently, on May 13, Coinmerce decided to minimize its exposure to Celsius by securing the majority of its assets on the platform.
Despite these measures, Coinmerce itself was impacted by the bankruptcy of Celsius. At the time of the bankruptcy, Coinmerce still had $2.5 million in crypto assets with Celsius. Coinmerce absorbed this loss to ensure that its users were not affected by Celsius‘s bankruptcy.
Jaap de Bruijn, CEO of Coinmerce, stated:
“We made the decision at the time to minimize our exposure to Celsius as a precaution. When Celsius filed for bankruptcy a month later, we prioritized our clients' interests without hesitation and covered the losses for our users. We are confident that we will reach an appropriate resolution.”
In the U.S., such bankruptcy cases are rarely resolved in full; American Celsius customers have been offered settlements of 27.5% of their original claims. Pursuing a 'clawback' claim is a complex task for curators, particularly when the claim needs to be enforced outside the U.S. In March 2024, Celsius proposed a settlement of 13.75% ($1.4 million) of the original amount to Coinmerce. However, after obtaining legal advice, Coinmerce declined this offer, citing, among other reasons, that it still has a claim against Celsius.
Dutch law does not provide for such a 'clawback' procedure, as it would conflict with the principle of fixation. U.S. bankruptcy law does not apply in the Netherlands, and any ruling by a U.S. court is not directly enforceable. Coinmerce believes that Celsius‘s claim will not hold up in the Netherlands, given the circumstances.
Following the collapse of the stable coin UST (TerraUSD) on May 9, 2022, Coinmerce reassessed its exposure to third parties. Subsequently, on May 13, Coinmerce decided to minimize its exposure to Celsius by securing the majority of its assets on the platform.
Despite these measures, Coinmerce itself was impacted by the bankruptcy of Celsius. At the time of the bankruptcy, Coinmerce still had $2.5 million in crypto assets with Celsius. Coinmerce absorbed this loss to ensure that its users were not affected by Celsius‘s bankruptcy.
Jaap de Bruijn, CEO of Coinmerce, stated:
“We made the decision at the time to minimize our exposure to Celsius as a precaution. When Celsius filed for bankruptcy a month later, we prioritized our clients' interests without hesitation and covered the losses for our users. We are confident that we will reach an appropriate resolution.”
In the U.S., such bankruptcy cases are rarely resolved in full; American Celsius customers have been offered settlements of 27.5% of their original claims. Pursuing a 'clawback' claim is a complex task for curators, particularly when the claim needs to be enforced outside the U.S. In March 2024, Celsius proposed a settlement of 13.75% ($1.4 million) of the original amount to Coinmerce. However, after obtaining legal advice, Coinmerce declined this offer, citing, among other reasons, that it still has a claim against Celsius.
Dutch law does not provide for such a 'clawback' procedure, as it would conflict with the principle of fixation. U.S. bankruptcy law does not apply in the Netherlands, and any ruling by a U.S. court is not directly enforceable. Coinmerce believes that Celsius‘s claim will not hold up in the Netherlands, given the circumstances.