Coinspeaker
Celsius Network Distributes Over $2.5B to Two-Thirds of Creditors
The beleaguered cryptocurrency lending firm Celsius Network is gradually resolving the repayment part of its bankruptcy proceedings. Based on a status report on the payouts, the firm’s bankruptcy administrator has successfully distributed more than $2.53 billion to about 251,000 creditors. By this number, Celsius Network has settled two-thirds of its eligible creditors and 93% in terms of eligible value.
Few Celsius Creditors Yet to Lay Claim on Distribution
These creditors received their assets in liquid cryptocurrency and cash, according to their worth as of January 16. Noteworthy, another 121,000 eligible creditors with an average distribution of approximately $1,500 have yet to lay claim to their assets.
In a Monday court filing, the Celsius Network administrator clarified that “approximately 64,000 of these remaining creditors have a distribution of less than $100, and approximately 41,000 more have a distribution of between $100 and $1,000”.
The administrator believes that most of these creditors may need to be incentivized enough to complete the Celsius bankruptcy plan. This plan was approved in November last year by the US Bankruptcy Court for the Southern District of New York.
This allowed the leading protocol to distribute approximately $2 billion worth of Bitcoin (BTC), Ethereum (ETH), and some shares of the new company NewCo to users who were unable to withdraw their funds before the steps necessary to claim a distribution because of the small amounts involved.
Celsius Network Exit Chapter 11 Bankruptcy
The firm finally exited Chapter 11 bankruptcy on January 31, 2024, to begin distributing the funds. Its restructuring plan received the approval of approximately 98% of the company’s account holders. At the time, Celsius Network even generated $250 million to add to the funds available for distribution. These funds were secured by converting the lender’s crypto holdings to Bitcoin and Ethereum.
This is in addition to the funds raised from previous settlements. Creditors are repaid through popular payment platforms like PayPal, Venmo, and the American crypto exchange Coinbase.
“Creating the best outcome for creditors by maximizing value and speed has been front of mind for Celsius throughout this process. Today, over 18 months after Celsius paused withdrawals, we began distributing over $3 billion of cryptocurrency, fiat, and stock in Ionic Digital to Celsius creditors,” Chris Ferraro, the former chief restructuring officer at Celsius, said at the beginning of this year.
In the seven months following the determination of its distribution plan, the filing noted that the “distribution process contemplated by the Plan is likely the most complicated and ambitious distribution process ever attempted in a Chapter 11 case”.
Meanwhile, Celsius Network tried to recover $3.3 billion from stablecoin issuer Tether, citing that the latter contributed to its crash. The lending platform has an active lawsuit against Tether in this regard. In order to recoup as much funds as possible, some of its former users have also hinted at suits filed against them for early withdrawals.
Celsius Network Distributes Over $2.5B to Two-Thirds of Creditors
