Celsius Distributes $2.5 Billion To 251,000 Creditors Amid Bankruptcy Proceedings

By Zoltan Vardai of CoinTelegraph

Celsius has repaid two-thirds of its eligible customers as part of its long-awaited bankruptcy proceedings. According to an Aug. 26 court filing, the bankrupt crypto lender has repaid approximately $2.53 billion to 251,000 creditors.

The amount represents approximately 84% of the $3 billion worth of assets owed by the defunct crypto lender to over 375,000 creditors.

The bankruptcy payments are a positive development for the expanding crypto industry. They coincide with the bankruptcy proceedings of the Mt. Gox exchange, which owed over $9.4 billion in crypto to 127,000 creditors. After 10 years, these creditors are finally beginning to recover their assets.

Not all creditors are actively looking to claim their cryptocurrency due to the small amount they are owed.

This is because of the remaining 121,000 creditors who have yet to claim their funds, around 64,000 have less than $100 worth of crypto, while 41,000 creditors are owed between $100 to $1,000, according to the filing:

“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 bankruptcy administrator will retry distributing to these creditors via Coinbase every two weeks, while PayPal claim codes remain redeemable for credits at all times.

The administrator said it “attempted more than 2.7 million distributions in total for the approximately 372,000 currently eligible creditors.”

Celsius filed for bankruptcy in July 2022, a month after it paused user withdrawals.

The company claimed that the pause was necessary to put it in a “better position to honor, over time, its withdrawal obligations” after the price of its native token, Celsius (CEL) plummeted in 2022.

Its bankruptcy saw Celisus settle $4.7 billion in fines with the United States Federal Trade Commission alongside settlements with the Department of Justice, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Its former CEO, Alex Mashinsky, was arrested and charged by federal prosecutors with various financial fraud, manipulating CEL’s price and misleading Celsius customers. Mashinsky has pleaded not guilty and is out on a $40 million bond pending trial in September.