As a researcher who has closely followed the turbulent journey of Celsius Network, I must say that it’s been quite the rollercoaster ride. The recent news about the distribution of assets to creditors is indeed a significant step towards resolving this saga. However, the fact that a substantial number of eligible creditors have yet to claim their assets raises some concerns.
The struggling cryptocurrency lending company, Celsius Network, is making progress on the repayment process related to their bankruptcy case. As per the latest update on payouts, their bankruptcy administrator has successfully distributed over $2.53 billion to approximately 251,000 creditors. This means that about two-thirds of eligible creditors and 93% of the total eligible value have been settled by Celsius Network.
Few Celsius Creditors Yet to Lay Claim on Distribution
The creditors were given their assets, which included liquid cryptocurrency and cash, based on their value as of January 16th. It’s worth mentioning that around 121,000 more eligible creditors, each anticipating an average distribution of about $1,500, have yet to collect their assets.
In the court filing on Monday, the administrator for Celsius Network explained that roughly 64,000 creditors are owed less than $100 each, while around 41,000 creditors have claims between $100 and $1,000.
It seems to me that the administrator is suggesting that many of these creditors might require sufficient motivation to finalize the Celsius bankruptcy scheme, which was endorsed by the U.S. Bankruptcy Court in the Southern District of New York back in November.
Through this process, the primary method facilitated the distribution of around $2 billion in Bitcoins (BTC), Ethereums (ETH), and shares from the new entity, NewCo, to users who couldn’t withdraw their funds earlier due to the minor quantities, as they were granted a distribution.
Celsius Network Exit Chapter 11 Bankruptcy
On January 31, 2024, the company successfully emerged from Chapter 11 bankruptcy, ready to disburse funds. A remarkable 98% of the company’s creditors endorsed its restructuring plan. Notably, Celsius Network managed to accumulate an additional $250 million towards the distribution pool. This extra sum was obtained by converting the lenders’ crypto assets into Bitcoin and Ethereum.
Beyond what was previously collected from past settlements, creditors will be reimbursed using widely-used platforms such as PayPal, Venmo, or the digital currency exchange, Coinbase.
“Throughout this process, ensuring the optimal result for creditors by focusing on maximizing value and speed has been a top priority for Celsius. As a significant milestone, nearly 18 months after Celsius halted withdrawals, we’ve commenced distributing approximately $3 billion worth of cryptocurrency, cash, and Ionic Digital stocks to Celsius’ creditors,” Chris Ferraro, the previous restructuring officer at Celsius, stated at the start of this year.
For the seven months after finalizing its distribution strategy, the filing indicated that the “proposed distribution method as per the Plan might be the most complex and ambitious distribution effort yet seen in a Chapter 11 scenario.”
Currently, Celsius Network is attempting to retrieve approximately $3.3 billion from stablecoin issuer Tether. They argue that Tether’s actions played a significant role in causing their platform to fail. As a result, they have an ongoing legal dispute with Tether. Additionally, some of its previous users are suggesting that they may also be taking legal action against them due to early withdrawals, in an effort to recover as many funds as possible.
Read More
Sorry. No data so far.
2024-08-27 18:06