Celsius Bankruptcy Admin Distributes $2.5 Billion In Cash And Crypto To Creditors

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As a seasoned researcher with a knack for deciphering complex financial situations, I find myself intrigued by the progress of Celsius Network’s distribution plan. With over two decades of experience in the banking and finance industry, I’ve witnessed numerous restructuring efforts, but none quite as ambitious or challenging as this.

1. Despite facing difficulties in the distribution process, Celsius Network – a bankrupt crypto lender – has managed to make payouts to about two-thirds of their creditors according to their initial report. This document also outlines the current status of the distribution plan and further steps for the repayment process moving forward.

Celsius Distribution Plan Targets 375,000 Creditors

On Monday, the plan administrator for Celcius submitted their initial Status Report about distributions to the US Bankruptcy Court in the Southern District of New York. In this court filing, the administrator disclosed that by August 2024, Celsius had successfully distributed over $2.5 billion of the eligible value due to creditors.

Over the past seven months, the plan administrator has been actively working towards achieving successful payouts for creditors, addressing queries, and resolving problems encountered by Celsius’s clients. As per the report, this distribution plan is considered to be “one of the most intricate and ambitious distribution processes ever undertaken in a Chapter 11 case.”

The plan appears to demand numerous months of hard work, assessment, and teamwork between Celsius’ bankruptcy administrator and several advisors. This is because it entails the allocation of “Liquid Cryptocurrency, Cash,” as well as MiningCo Common Stock for creditors who fall outside of the Convenience Class.

The repayments are done through Coinbase, PayPal, Venmo, and other platforms. The administrator tries distributions through Coinbase every two weeks, and cash distributions are attempted once per week. Meanwhile, PayPal claim codes can be redeemed at any time once issued.

Approximately 375,000 creditors spread across more than 165 countries were entitled to receive repayments, making the distribution process more complex. According to court documents, the plan’s complexity grew due to multiple regulatory bodies taking enforcement actions against Celsius for operating as a business that was not fully compliant with regulations.

$2.5 Billion Sent To Creditors

Starting from January 31, Celsius has distributed funds to over 251,000 creditors, which equates to about two out of every three eligible creditors and nearly 93% of their total eligible value.

Regardless of the hurdles faced, the bankrupt crypto lender has been steadily dispensing payouts totaling approximately $2.53 billion in both cash and cryptocurrencies, using prices fixed on January 16th. This initial distribution to eligible creditors has proven successful for a significant number of them.

Celsius Bankruptcy Admin Distributes $2.5 Billion In Cash And Crypto To Creditors

Initially, within the first fortnight of distribution, Celsius creditors received roughly 65% of the total possible value, equating to around $1.7 billion. A month later, this percentage rose to 80% of the then-eligible value, which represented approximately $2 billion.

For about three months now, the crypto lending company has paid out roughly 30% to 40% of the leftover funds, with approximately 121,000 creditors still eligible for payment. However, it appears that the remaining creditors are receiving relatively small payouts, which may not be enticing enough for them to proceed with the repayment process.

According to the report, out of the 121,000 creditors left, about 64,000 are owed less than $100 each. On the other hand, approximately 41,000 creditors have claims ranging between $100 and $1,000. To date, over 2.7 million attempts at repayment have been made for roughly 372,000 eligible creditors. The Plan Administrator will keep on trying to distribute funds based on the plan.

Celsius Bankruptcy Admin Distributes $2.5 Billion In Cash And Crypto To Creditors

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2024-08-28 09:12