Celsius to distribute $127M to creditors soon

Bankrupt cryptocurrency lending platform Celsius announced a second payout of $127 million from its “Litigation Recovery Account,” according to a November 28 update.

The funds will be distributed to creditors in specific classes, including retail borrower depositors, Earn program users, and unsecured claimants.

The announcement follows a filing on November 27 in the United States Bankruptcy Court for the Southern District of New York.

Payments will be made via PayPal, Venmo, or Coinbase, similar to the first distribution.

If no verified account exists, creditors will receive cash payments.

Corporate creditors are included in the payout, but convenience claim holders and those without illiquid recovery rights are excluded.

Despite the announcement, the response from some creditors has been mixed.

“You guys stole me 0.7 BTC and a bunch of other tokens! Give it back to me!” one user stated on X, Puffel, expressing frustration.

“Today I could be a millionaire… thieves,” another creditor, JCH, lamented losing eight Bitcoin (CRYPTO:BTC).

Celsius filed for bankruptcy in July 2022 following its financial collapse during the crypto market downturn.

Former CEO Alex Mashinsky was arrested in July 2023 on charges of fraud, accused of misleading depositors about the risks associated with the platform.

Mashinsky’s trial is scheduled to begin in January 2025.

Earlier this year, corporate creditors reported receiving reduced payments, claiming the estate relied solely on Coinbase for processing distributions.

Celsius has since reassured creditors that it is working toward resolving claims and ensuring equitable distribution.