Celsius Repays $2.53 Billion to 251,000 Creditors Amid Bankruptcy Process
Celsius, the bankrupt crypto lender, has made significant strides in repaying its creditors, distributing approximately $2.53 billion to 251,000 eligible claimants.
This payout represents roughly 84% of the $3 billion owed by Celsius to over 375,000 creditors. The company’s repayment process has been a critical development within the crypto industry, especially given the parallels with other high-profile bankruptcy cases like that of Mt. Gox, which has been ongoing for nearly a decade.
Celsius Network has revealed it has repaid over $2.5 Billion to creditors.
Celsius Network was one of the major lenders to go bankrupt in 2022.
This repayment spells a good omen for FTX creditors still hoping to get paid. #$25Billionhttps://t.co/kiCkWwYm7m pic.twitter.com/QTfcBmoSHD— BitcoinWorld Media (@ItsBitcoinWorld) August 28, 2024
Key Facts About the Repayment Process
The bankruptcy proceedings have highlighted the complexities of distributing funds to a large and varied group of creditors.
According to an August 26 court filing, Celsius has managed to repay two-thirds of its eligible customers.
It’s a loan program for the 20% down payment that must be repaid, in addition to 20% of any equity incurred. Even with that lifeline, banks aren’t going to sign off on million dollar homes in Los Angeles. It’s incredibly difficult to qualify, even with 20% down and 800+ credit.
— Garret Mathany (@dotheMathany) August 28, 2024
However, despite this progress, over 121,000 creditors have yet to claim their funds. Among these, about 64,000 creditors are owed less than $100 in crypto, and 41,000 are owed between $100 and $1,000.
The bankruptcy administrator noted that these smaller amounts might not incentivize some creditors to take action to claim their distributions.
- $2.53 billion was repaid to 251,000 creditors.
- 84% of owed assets have been distributed.
- 121,000 creditors still need to claim their funds, with many owed small amounts.
Ongoing Challenges and Future Distributions
Celsius is continuing its efforts to distribute the remaining funds, retrying distributions via Coinbase every two weeks.
Additionally, PayPal claim codes remain available for credits at any time. The bankruptcy administrator reported attempting over 2.7 million distributions to approximately 372,000 eligible creditors so far.
Despite the progress, challenges remain, particularly in reaching creditors who may not see value in claiming smaller amounts of cryptocurrency.
The country is facing a multitude of challenges, from economic inequality and political corruption to environmental degradation and social unrest, all of which require comprehensive and sustainable solutions.
— Jonna (@JonnaSE) August 28, 2024
The bankruptcy process for Celsius has also been marked by significant legal challenges. The company filed for bankruptcy in July 2022, a month after pausing user withdrawals due to the collapse of its native token, CEL.
The bankruptcy also led to Celsius settling $4.7 billion in fines with multiple U.S. regulatory bodies.
Additionally, former CEO Alex Mashinsky has been arrested and charged with financial fraud, including manipulating CEL’s price and misleading customers. He is currently out on a $40 million bond, awaiting trial in September.
The ongoing proceedings continue to shape the narrative of how crypto firms handle financial insolvency, highlighting both the challenges and opportunities for future cases.
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