The remaining creditors are linked with smaller distributions, with approximately 64,000 individuals owed less than $100 and around 41,000 owed amounts ranging from $100 to $1,000.
Defunct crypto lender Celsius has repaid over $2.5 billion to eligible creditors in its long-awaited bankruptcy proceedings. According to a court document, the bankrupt crypto lender has distributed approximately $2.53 billion to 251,000 creditors.
The amount accounts for about 84% of the $3 billion in assets that the now-defunct crypto lender owes to more than 375,000 creditors.
This includes $1.43 billion in crypto through PayPal/Venmo, $917 million in crypto assets through Coinbase, and $178 million in cash transfers. Celsius initiated the distribution on January 31 and achieved $2 billion in total distributions by February.
Over 120,000 Creditors Yet to Claim a DistributionÂ
According to the filing, approximately 121,000 creditors have yet to receive a distribution due to the process’s intricacies. These complexities include creating a PayPal account with a matching date of birth, setting up a Coinbase account with a corresponding email address and date of birth, or providing accurate wire instructions and mailing addresses for checks to the PostEffective Date Debtors.
The filing revealed that most of the remaining creditors are associated with smaller distributions, with approximately 64,000 individuals owed less than $100 and around 41,000 owed amounts ranging from $100 to $1,000.
“Given the small amounts at issue for many of these creditors, they may not be incentivized to take the steps needed to successfully claim a distribution,” the document stated.
The Plan Administrator reported having made over 2.7 million distribution attempts for the 372,000 creditors, usually retrying distributions through Coinbase weekly and cash distributions once per week. This includes “numerous reattempts for nearly all of the creditors who have not yet successfully received their distributions.”
Under Celsius’ sanctioned reorganization plan, a portion of the funds was allocated to create a new Bitcoin mining enterprise called Ionic Digital. Selected Celsius creditors will hold ownership in the mining company through common shares, which are anticipated to be traded publicly once the company obtains the required approvals. The Miami-based mining firm Hut 8 will manage Ionic’s mining activities under a four-year management contract.
Celsius Files for Bankruptcy
Celsius filed for bankruptcy in 2022 after revealing a $1.2 billion shortfall on its balance sheet. The company emerged from bankruptcy in November.
In 2013, Celsius and its founder and former CEO Alex Mashinsky faced lawsuits from multiple regulators, including the Securities and Exchange Commission, the Federal Trade Commission, and the Commodity Futures Trading Commission, alleging deceptive practices towards customers. Mashinsky also faced fraud charges, with his trial set to begin on September 17.
