Celsius, the bankrupt cryptocurrency lending firm, has announced plans to distribute an additional $127 million to its creditors, continuing its efforts to reimburse those impacted by its collapse in 2022.
The distribution will be made from Celsius’s “Litigation Recovery Account” and is set to benefit claimants in specific classes, including retail borrower deposit claims, general earn claims, withhold claims, unsecured loan claims, and general unsecured claims.
Creditors eligible for this distribution can expect to receive their payouts in either Bitcoin or cash, depending on their qualifications.
Disbursing Details
According to the filing, payment will be processed through platforms like PayPal, Venmo, or Coinbase, similar to the methods used during a previous distribution in August.
For creditors without verified accounts on these platforms, payments will be made in cash. Corporate claimants may also receive payments, although those with convenience claims will not be included in this round.
Celsius will soon begin a second distribution of $127 million made available from the Litigation Recovery Account to eligible creditors (Classes 2, 5, 7, 8, and 9). Distributions will be made in BTC or USD, based on eligibility. For more details, please refer to this notice:…
— Celsius (@CelsiusNetwork) November 27, 2024
Celsius explained that this second distribution will cover approximately 60.4% of the value of eligible claims as of the petition date, based on a Bitcoin price of $95,836.23.
In comparison, the first round of distributions saw the company return $2.53 billion to 251,000 creditors, representing 57.65% of total claims. The second payout is expected to bring additional relief, though many creditors remain dissatisfied with the returned amounts.
Not a Happy Ending After All
Some former customers have voiced frustration over the payouts. One creditor, for instance, expressed that despite receiving the distribution, they were still short by six figures. Another creditor, who had lost 8 BTC in the collapse, referred to their payout as “peanuts,” indicating disappointment over the limited compensation.
Following the 2022 collapse of Celsius, its former CEO, Alex Mashinsky, was arrested in July 2023 on fraud charges for allegedly misleading depositors about the risks of investing in the platform.
Mashinsky is scheduled to face trial on January 28, 2025, with a pre-trial hearing set for January 16, 2025, after a federal court recently ruled that his motion to dismiss the fraud charges was without merit.
While the distribution offers some relief to creditors, many still face substantial losses, and legal proceedings against Mashinsky will continue to be a focal point in the ongoing recovery efforts.