Bankruptcy: Celsius disburses $2b worth of crypto to creditors

Bankrupt cryptocurrency platform Celsius has allocated $2 billion worth of crypto to thousands of creditors.

The distribution, facilitated through PayPal and Coinbase, forms part of Celsius Network’s ongoing strategy to address obligations to creditors.

Celsius repays creditors

In a recent court filing, Kirkland & Ellis — the Chicago-based law firm advising Celsius — shared an update on the creditor fund distributions outlined in the restructuring plan. This development comes after Celsius announced its emergence from bankruptcy, a process initiated in July 2022.

Kirkland & Ellis disclosed that distributions of cryptocurrency to U.S. holders are conducted via PayPal, while Coinbase serves as the distribution agent for overseas holders. The legal team has confirmed the transfer of $2 billion worth of crypto assets to creditors, including 20,255.66 Bitcoin and 301,338.77 Ether.

The distribution of cryptocurrency to the majority of creditors rather than cash — as is usually the case in chapter 11 bankruptcies — “has hastened the speed of distributions,” the filing states.

The debtors “have successfully commenced a global distribution process to hundreds of thousands of creditors without encountering any significant operational or security
issues,” the counsel explained.

Account holders who didn’t agree to the restructuring plan won’t receive any funds distribution until their claims are resolved.

It also highlighted that certain account holders might face challenges in receiving their distributions if Coinbase or PayPal detects any Anti-Money Laundering (AML) or compliance issues.

The filing further made it clear that distribution agents have the discretion to refuse to make distributions to anyone they believe does not fulfill their compliance and other requirements.

Celsius files Chapter 11

On July 13, 2022, Celsius Network LLC — a cryptocurrency lending and borrowing platform managing around $25 billion in customer assets — filed for Chapter 11 bankruptcy.

The same day,

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Author: Ogwu Osaemezu Emmanuel

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