Celsius Distributes $2B Crypto to 172K Creditors

Celsius has made progress in distributing liquid bitcoin to qualified creditors through Coinbase and PayPal.

According to the bankrupt cryptocurrency lender, the majority of qualified creditors have now received their liquid bitcoin allocations from Celsius’s two distribution agents the cryptocurrency exchange Coinbase and the massive payments company PayPal.

The legal team for Celsius, Kirkland & Ellis, recently filed a court document with an update on the creditor distributions according to the restructuring plan. This comes after Celsius declared bankruptcy in July 2022 and announced last week that it had emerged from the process. Kirkland & Ellis state that Coinbase serves as the distribution agent for cryptocurrency distributions to holders abroad, while PayPal facilitates distributions to US holders.

The attorneys announced that $2 billion in cryptocurrency including 20,255.66 Bitcoin had been handed to creditors. Nevertheless, the document clarified that until their specific claims are settled account holders who rejected the reorganization proposal would not get any cryptocurrency distribution.

“As of the date hereof, a significant number of Holders have successfully collected their Liquid Cryptocurrency from PayPal/Venmo and Coinbase: Nearly 75% of the BTC/ETH set to be distributed by PayPal/Venmo and through Coinbase has already been collected.”

Furthermore, it stated that in the event that Coinbase or PayPal raises any red flags related to compliance or anti-money laundering (AML), some account holders may experience difficulties obtaining their distribution. According to the petition, “Distribution Agents have the authority to decline distributions to any individual they suspect does not meet their compliance and additional prerequisites.

Within the cryptocurrency community, there has been speculation regarding the potential impact of the reorganization plan’s measures on the overall cryptocurrency market. To guarantee prompt payments to creditors, Celsius began recalling and adjusting its cryptocurrency holdings on January 5

However, at the moment blockchain analytics company Nansen pointed out that Celsius currently possesses about a third of the ETH in the pending withdrawal queue.With the goal of having creditors paid off before the end of 2023, Celsius requested the court approve its restructuring plan in October 2023. Regarding Celsius’s failure, a trial for Alex Mashinsky, the former CEO of the now-defunct crypto lenderis set for September 2024.

But because his legal team also represents Sam Bankman-Fried, the former CEO of the defunct cryptocurrency exchange FTX, they have recently come under fire for possible conflicts of interest.

On February 6, U.S. prosecutors voiced concerns over attorneys Marc Mukasey and Torrey Young, who have both filed notices of appearance in the criminal charges against the former cryptocurrency CEO the U.S. government requested a Curcio hearing, during which the courts could inquire about possible conflicts of interest and the reasons behind the involvement of both attorneys in the cases of Bankman-Fried and Mashinsky.