Celsius to appeal decision blocking $444M claim against FTX

Celsius, the crypto lending platform, has filed a notice of appeal against a court order that disallowed its claims for damages against FTX (CRYPTO:FTT) in its ongoing bankruptcy proceedings.

Celsius had initially sought $2 billion in damages from FTX, accusing the firm of making disparaging statements that contributed to its downfall.

This claim was later revised to focus on $444 million in alleged "preferential transfers," where some creditors were given special treatment over others.

Judge Dorsey dismissed both claims in December, ruling that Celsius’s original filings were insufficient to support the claims.

Specifically, the claims lacked detailed information and failed to adequately preserve the preference claims.

The judge found that the claims filed by Celsius were not properly amended and failed to justify the delay in filing.

He also noted that allowing the amendments could prejudice FTX’s ongoing reorganization efforts.

In response, Mohsin Meghji, the litigation administrator for Celsius and its affiliates, filed a notice of appeal on December 31, challenging Judge Dorsey’s memorandum opinion and order.

Sunil Kavuri, an FTX creditor activist, provided additional context on January 2, explaining that Celsius initially filed its $2 billion disparagement claim before the bar date but amended it after the bar date to file the $444 million preference claim.

Celsius argues that its original claims were adequate to put FTX on notice about the potential avoidance claims.

The firm maintains that the amendments were valid and should not have been dismissed.

As of the latest filings, Celsius has repaid approximately $2.53 billion to creditors, covering 84% of the assets owed.

Despite this, the Celsius token (CRYPTO:CEL) has seen significant price declines, falling 97.5% from its all-time high.

At the time of reporting, the Celsius Network price was $0.196, and the FTX price was $3.88.