Bankrupt crypto lender Celsius has now repaid two-thirds of its creditors, which is 93% of eligible debt.
According to a recent court filing, the company has distributed $2.53 billion to more than 251,000 creditors since it began a repayment plan in January 2024.
Celsius, which declared bankruptcy in July 2022, allowed users to receive interest on crypto deposits. At its peak, the company had $1.7 million in assets under management with $25 billion in assets and an $8 billion loan book, he said.
After a series of lengthy legal disputes where users were locked out of access to their crypto for more than a year, a plan to reinstate former users was approved in November 2023.
The plan, approved by Delaware's bankruptcy court, involves the creation of a new company, NewCo, backed by $450 million in seed funding. The restructuring team said in its filing that NewCo will focus on Bitcoin mining and staking.
Celsius borrowers received cash and crypto for their losses in a recent distribution process, and some beneficiaries received common stock in Nasdaq-listed Newco.
In the year On January 16, 2024 Cryptocurrency debt values are calculated based on existing values.
About 121,000 creditors have yet to successfully claim their share of the distribution, but these are generally former beneficiaries with small amounts of debt.
According to the latest filing, about 64,000 creditors have yet to claim dividends under $100.
Of these, 41,000 users who have not yet claimed their money are entitled to a distribution of between $100 and $1,000.
The court noted that these smaller creditors “may not have the incentive to take the necessary steps to successfully request distribution.”
Despite the 93 percent figure, the rollout process was plain sailing for Celsius lenders.
“The distribution process contemplated by the plan may be a more complex and ambitious distribution process than that attempted in a Chapter 11 case,” the filing said.
The court noted that several issues complicated the distribution process, including “creditors not reading emails or reclaiming claim codes sent for distribution by PayPal.” The court said some lenders failed to successfully pass KYC/AML checks to open accounts with PayPal or Coinbase.
Despite recent progress, the complexity of Celsius' legal disputes is still growing.
In the year On August 9, Celsius filed a lawsuit alleging that $2.4 billion in Bitcoin was improperly disposed of by stablecoin firm Tether before it filed for bankruptcy in July 2022.
The issue was dubbed a “shakedown” by Tether in response.
Edited by Stacy Elliott.
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