Celsius distributes $2 billion in Bitcoin and Ethereum to majority of creditors.
Insolvency firm Celsius confirmed that the company had distributed most of its funds to creditors, but that it would take time to resolve conflicts with creditors who had not agreed to the company’s proposals.
Celsius is a bankrupt cryptocurrency company. Prior to May 2022, Chelsea was a popular cryptocurrency lending platform but fell badly due to the collapse of the Terra (Luna) cryptocurrency empire. The company filed for Chapter 11 bankruptcy protection in July 2022.
As we already reported on February 1, 2023, Chelsea was prepared to distribute funds to creditors who agreed to the company’s restructuring plan.
According to a recent court filing, Chelsea’s flagship law firm, Kirkland & Ellis, provided an update on creditor distributions as outlined in the restructuring plan.
As per the filing update, the company distributed 75% of the funds to customers through Coinbase for U.S.-based customers and PayPal for non-U.S. customers.
So far, there have been 20,255.66 Bitcoin and 301,338.77 Ethereum distributed, which amounts to nearly $2 billion at the current trading prices of these two major cryptocurrency assets.
The law firm confirmed that only creditors in jurisdictions that do not agree with the company’s bankruptcy liquidation plan, cannot use Coinbase and PayPal services, or are restricted by some kind of law will not be able to receive the funds.
For such creditors, the Company will resolve the matter on an individual basis based on their concerns.
While this is really good news for all Celsius creditors, some believe that the steps to exit bankruptcy involve many challenges and will have a major impact on the cryptocurrency sector.
Meanwhile, Alex Mashinsky, former CEO of now-bankrupt cryptocurrency lender Celsius, is scheduled to go on trial in September 2024 in connection with Celsius’ bankruptcy.
In the early stages of Celsius’ downfall, Alex was eager to restart and reorganize the platform, but the majority of the dominant stakeholders rejected his ideas. He was later arrested on charges of manipulating the trading price of Celsius (Cel) tokens and misleading investors, and filed for bankruptcy.
Also read: Honduran securities regulator bans banks from investing in and trading cryptocurrency