Celsius Distributes $2.53 Billion to Creditors Amid Complex Bankruptcy Proceeding

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As an analyst with over two decades of experience navigating the intricacies of bankruptcy cases and the crypto market, I find the Celsius Network saga particularly intriguing. The recent distribution of funds to creditors, covering nearly 93% of the eligible value, is a step in the right direction, but the remaining 121,000 creditors with small balances yet to claim their funds raises some eyebrows.

Celsius Network, a crypto lending company that declared bankruptcy on July 13, 2022, has dispersed around $2.53 billion to nearly 251,000 of its creditors as per the latest report from its bankruptcy administrator. This distribution was made in liquid cryptocurrencies and cash, based on prices as of January 16, 2023. These disbursements are estimated to cover around two-thirds of creditors by number and about 93% of the total value of eligible claims. The details were submitted to the court on Monday.

As per an article by Amitoj Singh for CoinDesk, this report mentioned that out of the eligible creditors, approximately 121,000 have not yet received their funds. Of these remaining creditors, about 64,000 are owed less than $100, and around 41,000 have distributions ranging from $100 to $1,000. The filing highlighted that the relatively small amounts might deter some creditors from taking the required steps to claim their distributions.

The bankruptcy proceedings for Celsius were officially concluded when the U.S. Bankruptcy Court in the Southern District of New York approved a restructuring plan in November 2023. This plan, finalized in January 2024, consisted of distributing approximately $3 billion to Celsius’s creditors, which included liquid cryptocurrency, cash, and common stock in MiningCo – the company that succeeded Celsius. The administrator described the distribution process as one of the most complex and daring ever undertaken in a Chapter 11 case, involving around 375,000 creditors spread across over 165 countries.

1. The regulatory issues faced by Celsius before filing for bankruptcy have made the distribution process more intricate, since the company was not entirely in compliance with regulations and was subject to enforcement actions from multiple regulators. Moreover, Celsius has petitioned the bankruptcy court to force Tether to release around $3.3 billion in Bitcoin, a demand that Tether has vehemently rejected, characterizing it as “extortionate” legal action.

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2024-08-27 20:16