Celsius files new appeal against Judge order denying $444m claim on FTX damages

Defunct crypto lender Celsius Network filed a notice of appeal after Judge John Dorsey denied the company’s request for FTX damages worth about $444 million, according to creditor activist from FTX.

Court documents showed that the crypto lending platform filed a notice of appeal challenging the ruling by Judge John Dorsey, who denied Celsius‘complaints for FTX damages worth approximately $444 million. The lawsuit is part of FTX’s ongoing bankruptcy proceedings that reportedly seek to repay damages caused by the fallen crypto exchange run by Sam Bankman-Fried.

According to the appeal filed by Celsius Network litigation administrator Mohsin Meghji, Celsius initially filed a claim for up to $2 billion in damages due to “unsubstantiated and derogatory statements” on the balance sheet. and the financial stability of the company by FTX executives that the company’s lawyers have stated. believe that the collapse of Celsius accelerated in 2022.

However, ahead of the deadline, Celsius reduced the claim amount to around $444 million as the crypto lending company said it would focus on restoring “preferential transfers” that would prioritize repayments of certain creditors.

According to the document, the FTX debtors rejected Celsius’s claims because they believed the original evidence filed by the company was not sufficient to support the claim. Additionally, the $2 billion to $444 million amendment was allegedly filed “too late and should be rejected.”

Celsius argued that the original evidence should be sufficient to meet the minimum requirements of the Bankruptcy Code and put the debtors on notice.

Last December, Judge Dorsey rejected both the amended $444 million claim and the original $2 billion claim, saying Celsius’s original proof of claim – which contained only one sentence about the investigation into preference claims – was not sufficient to support its claims for FTX damages.

Additionally, the court found that the amended evidence Celsius filed in July was not legitimate because the revised claim was not related to the original claims. Additionally, Celsius did not request leave to amend or provide an explanation for the late filing.

At the end of November 2024, Celsius committed to distributing $127 million of its credits from its litigation collection account. The same month, a federal judge in New York spoke out against Former Celsius CEO Alex Mashinsky’s attempt to dismiss two fraud charges.

Mashinsky is accused of manipulating the price of Celsius’ native token, THE. He faces two charges of wire fraud and market manipulation following the collapse of the crypto lending company, which could carry a maximum sentence of 115 years in prison.