TL;DR
- Celsius has repaid $2.53 billion to 251,000 creditors, covering 84% of the $3 billion owed, but 121,000 creditors remain unpaid, many of whom are owed small amounts.
- Routine distribution process: Bi-weekly attempts via Coinbase and PayPal claim codes have been made to distribute the remaining funds, with over 2.7 million attempts for 372,000 eligible creditors.
- Legal actions: Celsius settled $4.7 billion in fines with US agencies, and former CEO Alex Mashinsky faces federal charges of financial fraud and price manipulation.
Celsius, the beleaguered cryptocurrency lender, has made significant strides in its bankruptcy proceedings by repaying approximately $2.53 billion to 251,000 creditors, as revealed in a recent court filing. This repayment accounts for about 84% of the total $3 billion owed to over 375,000 creditors.
This milestone is a crucial step in Celsius’s efforts to resolve its financial crisis following its bankruptcy filing in July 2022. The repayment process has seen two-thirds of eligible customers compensated, signaling a positive development for the broader crypto industry.
This progress mirrors the recovery efforts of other major crypto exchanges, such as the Mt. Gox exchange, which is also navigating its bankruptcy proceedings. Mt. Gox, which owed over $9.4 billion to 127,000 creditors, has begun returning assets after a decade-long wait.
Despite this notable advancement, not all creditors have actively pursued their funds. Out of the 121,000 creditors who have yet to claim their money, a significant portion is owed relatively small amounts.
Approximately 64,000 creditors are owed amounts under $100, while 41,000 are owed between $100 and $1,000. This scenario has resulted in a diminished motivation for these creditors to pursue their claims, considering the relatively small sums at stake.
To address this, the Celsius bankruptcy administrator has implemented a routine distribution process. The distribution of the leftover funds occurs every two weeks through Coinbase, while PayPal claim codes can be redeemed at any time.
To date, more than 2.7 million distribution attempts have been made for the approximately 372,000 currently eligible creditors.
Legal Actions Amid Repayments
The Celsius bankruptcy saga has also been marked by significant legal and regulatory actions. The company reached an agreement to pay $4.7 billion in penalties to several US agencies, such as the Federal Trade Commission and the Securities and Exchange Commission.
In addition, former CEO Alex Mashinsky is currently facing federal charges related to financial fraud and price manipulation. Although he has pleaded not guilty, Mashinsky is free on a $40 million bond as he awaits his trial.
As Celsius works diligently to settle its debts and address its financial challenges, these recent events provide a hopeful outlook for the troubled landscape of cryptocurrency lending.
