With users waiting with bated breath for the bankruptcy proceedings of crypto lender Celsius to play out, Paxful has vowed to refund all impacted users of the Paxful Earn product.
Relief For Users
Ray Youssef, the CEO of peer-to-peer Bitcoin Marketplace Paxful, has stated that the firm will be refunding all impacted users of its Paxful Earn program. In partnership with bankrupt crypto lender Celsius, the Earn program allowed users to earn a yield on their Bitcoin. However, users were left in limbo, as Celsius’s bankruptcy meant they could not access their funds, as the lender froze withdrawals. However, the announcement by Paxful has given them hope. In a public statement, Youssef noted,
“Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius. Another hit came when the courts ruled that Celsius Earn Accounts belonged to Celsius’ bankruptcy estate, not to its users.”
While announcing the news, the Paxful CEO stated that he was personally taking action and would ensure that all impacted users would be refunded. He added on Twitter,
“We have done the right thing and refunded @paxful users who lost funds with Celsius Earn. I could not stand by and watch them suffer, so we’ve made them whole. Our users always come first to me. This is the way!”
As of now, it is still being determined how much Paxful will be returning to its users. Celsius had paused all withdrawals in June when the Bitcoin price slumped below $20,000. This brought the firm’s DeFi loans dangerously close to being liquidated. The firm filed for bankruptcy soon after and has managed to pay off only a small segment of creditors involved in its program.
Decision Did Not Sit Right
The Paxful CEO, commenting on the judge’s decision that Celsius was the owner of the funds in its interest-bearing Earn Program and not the users, stated that the decision did not sit right with him.
“The collapse [of Celsius] hurt countless users and damaged trust in our industry. Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius. Another hit came when the courts ruled that Celsius Earn Account belonged to Celsius’ bankruptcy estate, not to its users. This didn’t sit right with me then, and it still doesn’t sit right with me today.”
Not The First Appeal On Behalf Of Users
The CEO stated that everyone needed to hold themselves to a higher standard, ensure transparency, and put themselves above profit. However, this was not the first time he had made such a statement. In December, he had made a similar appeal while announcing that his marketplace would no longer support Ethereum trading. He had, at the time, put complete faith in Bitcoin, calling it the only workable tool for freeing billions of people from Economic Apartheid.
Paxful is extremely prominent in the Global South, generating anywhere between $30 million to $40 million in weekly volume, a majority of which comes from Argentina.
Celsius’s Ongoing Bankruptcy Proceedings
Meanwhile, Celsius’s bankruptcy proceedings continue to roll on. Recently, the committee of unsecured creditors and a group of account holders reached a settlement that was approved. This settlement allowed account holders to recover just over 72% of their crypto holdings. Celsius had also announced that NovaWulf Digital Management would be sponsoring its restructuring plan and claimed that nearly 85% of its customers would be able to recover around 70% of their crypto assets.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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