According to the data of Akhram, Celsius Network has successfully distributed over $2.5 billion to more than 250,000 creditors, as a part of its bankruptcy case that began in July 2022.
According to a recent court filing, this amount represents 93% of eligible funds that have been distributed as part of the court-approved reorganization plan.
The troubled crypto lending platform, which at its peak managed $25 billion in assets for 1.7 million users, filed for bankruptcy in 2022 after a collapse in the crypto markets. Since January of this year, Celsius has been distributing assets totalling over $3 billion to its creditors, with only $13 million in crypto remaining on-chain.
Creditors Reimbursed After Long Legal Battle
Following over a year of users being unable to access their cryptocurrency holdings because of bankruptcy proceedings, the compensation process has begun. In November 2023, a reorganisation plan was approved by the United States Southern District of New York Bankruptcy Court, ending lengthy legal fights and allowing creditors to receive their money back.
Reimbursing more than 375,000 creditors in 165 countries is a complicated and ambitious distribution scheme that has never been undertaken in a Chapter 11 case before. The refund consists of cash, liquid cryptocurrency, and common stock in MiningCo—the newly created company created from whatever is left of Celsius.
Despite the substantial progress, challenges have emerged, particularly with smaller creditors. Approximately 64,000 creditors, mostly with balances under $100, have not yet claimed their distributions. Among them, 41,000 are entitled to amounts ranging from $100 to $1,000. The court noted that many smaller creditors may not feel incentivized to go through the steps required to claim their funds.
Further complexities have included recipients not redeeming email-sent claim codes, problems passing KYC/AML checks for PayPal and Coinbase accounts, and legal obstacles resulting from Celsius’s prior financial regulatory violations.
Closing One of Crypto’s Most Notorious Bankruptcies
Celsius’ bankruptcy, one of the largest in the crypto space, officially closed with this distribution effort. The company was originally marketed as a platform for users to earn interest on crypto deposits and boasted millions of users. However, after the crash of the crypto market, Celsius was unable to sustain its business, leading to its downfall.
This resolution brings closure to a long and painful saga for Celsius’ creditors, who have faced significant losses, but at least some level of recovery. With the bankruptcy case now closed, the focus will shift to how the crypto industry can rebuild trust following high-profile failures like Celsius and others.