Key Takeaways
- The payout will primarily consist of liquid crypto like Bitcoin, converted at an average rate of $95,836.23 per BTC, and cash, depending on individual eligibility and preference.
- For creditors unable to accept crypto, distributions will be processed in cash through payment channels
Bankrupt crypto exchange, Celsius Network has announced a second distribution of $127 million to eligible creditors. As per a recent court filing, the payout will cover creditors across various classes, including retail depositors, users of the “Earn” program, and unsecured loan claimants. The new distribution raises the recovery rate to 60.4% of eligible claims, building on the 57.65% recovery from an earlier payout in January 2024.
The latest payout will primarily consist of liquid crypto like Bitcoin, converted at an average rate of $95,836.23 per BTC, and cash, depending on individual eligibility and preference.
For creditors unable to accept crypto, distributions will be processed in cash through payment channels like PayPal, Venmo, or wire transfers. To streamline the process, Celsius is leveraging distribution agents used in earlier rounds, such as Coinbase, which requires verified accounts for crypto payments.
Since declaring bankruptcy in mid-2022, it has worked under court oversight to fulfill its financial obligations. The January 2024 payout, which returned $2.53 billion to over 251,000 creditors, was a significant milestone.
Legal and logistical hurdles continue to complicate the recovery process. For instance, creditors who missed deadlines or failed to complete Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements may face delays. Some corporate creditors with incomplete documentation or ineligible claims remain excluded from this round. Additionally, the distribution plan avoids converting certain reserves into crypto to minimize costs.
The proceedings also cast a spotlight on Celsius’s former CEO, Alex Mashinsky, who faces multiple fraud charges tied to the firm’s collapse. Accusations include market manipulation and misleading investors about the platform’s risks. Mashinsky’s trial is set for January 28, 2025, with a pretrial hearing scheduled for January 16. If convicted, he could face up to 115 years in prison.
