Investors of the closed cryptocurrency platform Celsius can wait for their money for years

The prospects for Celsius' creditors to recover their funds in the near future look dim, and the parties are advised to prepare for a lengthy legal battle.

Celsius sent shockwaves through the crypto industry when it halted withdrawals last month, citing unfavorable market conditions. The move was followed by a Chapter 11 bankruptcy filing in New York, which revealed a $ 1.2 billion deficit in its balance sheet and more than 100,000 creditors.

Six lawyers specializing in bankruptcy cases said that settling disputes with creditors of a company in dire straits will be a complex process that could take years to resolve. Other crypto firms, such as Voyager and Three Arrows Capital, have also filed for Chapter 11 bankruptcy to «reorganize» their business relationships, debts, and assets.

Part of the reason for the expected delay in the court is the lack of previous court precedents. James van Horne, a partner at Barnes & Thornburg, told reporters that «it is unknown how the courts will treat cryptocurrency lending companies.»

Another factor that could lead to the continuation of the process is the classification of Celsius lenders. There is speculation that customers may be labeled as «unsecured creditors,» and this class «has no targeted rights to any funds or anything else,» Horne added.