Celsius to Distribute $127 Million in Second Payout to Creditors

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As a seasoned crypto investor who weathered the 2022 storm and witnessed the tumultuous Celsius saga unfold, I must admit that the recent news of the second distribution of $127 million brings a much-needed sigh of relief. The thought of receiving my long-awaited payout in Bitcoin or Ethereum, rather than just US dollars, is a welcome change, especially considering the potential for future growth in the crypto market.

Celsius is planning to release another $127 million to qualified creditors, drawn from its Litigation Settlement Fund.

The funds will be distributed in Bitcoin (BTC), Ethereum (ETH), or US dollars, depending on eligibility.

A Sigh of Relief for Most Celsius Creditors

As per the recent bankruptcy court submission, the administrators responsible for litigation have set aside around $127 million (after accounting for charges and costs) for distribution in the second phase of compensation payments.

As a seasoned financial analyst with years of experience navigating complex bankruptcy cases, I can confidently say that this allocation is a critical aspect of the Celsius bankruptcy plan. The funds will be distributed to debtors whose claims become effective after the specified date, who also hold Illiquid Recovery Rights. It’s important to note that these rights are unique and not all creditors will qualify for them.

Specifically, creditors who prefer to get their payout in Bitcoin (BTC) or Ethereum (ETH) should ensure they have an active Coinbase account. It’s crucial that the information associated with this account aligns with what’s on file with Celsius.

According to the terms of the Coinbase Agreement, starting from November 9, 2024, any non-corporate creditors who haven’t received their Celsius distribution through Coinbase will be redirected automatically to a partner that specializes in US dollar distributions. This information was shared by Celsius on platform X (formerly Twitter).

Currently, the legal issues facing ex-CEO Alex Mashinsky persist. Recently, a federal court refused his petition to drop two fraud allegations linked to the downfall of Celsius.

This involves accusations of manipulating the CEL token market, for which the court has decided to move forward with the investigation under both the Commodity Exchange Act and the Securities Exchange Act.

In 2022, Mashinsky is facing seven allegations of criminal activity linked to the collapse of the company, and if found guilty, he may be imprisoned for a maximum of 115 years.

A while ago, US Judge Kaplan called Sam Bankman-Fried to court over allegations of a possible conflict of interest in his lawyer’s past representation. The lawyers handling the case brought up questions about Bankman-Fried’s attorney, as this individual had previously worked for Alex Mashinsky.

The well-known law firm, Kirkland & Ellis, who handled bankruptcy proceedings for companies like Celsius, BlockFi, and Voyager Digital, is said to have accumulated approximately $120 million as fees from their services.

It appears that the Celsius bankruptcy story may be drawing to a close. The 2022 crypto winter brought difficulties for many users, with some experiencing more severe impacts. Yet, the recent repayment could offer relief. The upcoming trial of the former CEO Mashinsky is scheduled for January 2025.

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2024-11-28 02:25