Celsius distributes over $2.5 Billion to 251,000 creditors in Bankruptcy Payouts

Defunct Celsius has distributed over $2.5 billion to 251,000 creditors as part of its long-awaited bankruptcy payouts.

This represents the payment of two-thirds of its eligible customers owed, Celsius said in its first status report on the payouts. This sum amounts to about 84% of the $3 billion in assets that the now-defunct cryptocurrency lender owed to more than 375,000 creditors.

The bankrupt crypto lender Celsius said that about 251,000 of the 372,000 (68%) eligible creditors from 165 countries have already received distributions; the remaining creditors primarily received smaller amounts, as confirmed by the administrator of Celsius' bankruptcy plan in a status report submitted late Monday.

This comprises cash transfers of $178 million, $917 million in cryptocurrency via Coinbase, and $1.43 billion in cryptocurrency via PayPal/Venmo. Celsius began the process on January 31 and had distributed $2 billion by February. The payouts are determined by taking into account the prices of cryptocurrencies on January 16, 2024.

Due to the intricacy of the process, approximately 121,000 creditors have not been able to successfully request a distribution. Examples of such tasks include creating an account at PayPal with a birthdate that matches, creating an account at Coinbase with a birthdate and email address that matches, or giving the Post-Effective Date Debtors precise wire instructions and/or mailing address for a check, according to the filing.

However, according to the filing, the majority of the remaining creditors are related to small distributions; approximately 64,000 owe a distribution of less than $100, and 41,000 owe a distribution between $100 and $1,000. The document also states that many of these creditors may not be motivated to take the necessary actions in order to successfully request a distribution because of the small amounts at stake for them.

In total, the plan administrator asserts that it has attempted over 2.7 million distributions for the 372,000 creditors. Generally, this involves retrying cash distributions once a week and Coinbase distributions every two weeks. Additionally, it includes "numerous reattempts for nearly all of the creditors that are yet to receive their distributions successfully.”

Part of the money allocated to Celsius' authorized reorganization plan was also utilized to launch Ionic Digital, a new bitcoin mining firm. The mining company will be owned by certain Celsius creditors through common shares, which are anticipated to be listed on a public market once the firm obtains the required approvals. Under a four-year management agreement, Ionic's mining operations will be managed by Miami-based Hut 8, the post added.

In July 2022, Celsius ceased user withdrawals and filed for bankruptcy. After the value of its native token, Celsius (CEL), crashed in 2022, the company stated that the pause was required to put it in a "better position to honor, over time, its withdrawal obligations." Celisus settled $4.7 billion in fines with the Securities and Exchange Commission, the Department of Justice, Commodity Futures Trading Commission, and the US Federal Trade Commission as a result of its bankruptcy.

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