Key Takeaways
- Nearly 75% of the crypto set to be distributed through PayPal/Venmo and Coinbase has already been collected by eligible creditors.
- 20,500 BTC and 301,000 Ether tokens have been distributed among eligible creditors
Celsius, the cryptocurrency lending platform that filed for bankruptcy in 2022, has announced significant progress in distributing owed crypto assets to its creditors. According to court documents filed on Friday, the company has successfully distributed the majority of the crypto owed to its creditors through distribution agents PayPal and Coinbase.
The distribution process began at the end of January, with Celsius aiming to distribute $3 billion worth of crypto assets to its creditors. As of the latest update, nearly 75% of the crypto set to be distributed through PayPal/Venmo and Coinbase has already been collected by eligible creditors.
In addition to the crypto distributions, Celsius also addressed the distribution of shares in the new mining company created using the remaining assets of the platform. Eligible creditors for these shares will receive emails from the transfer agent, Odyssey Transfer and Trust Company.
As per court filing, around 20,500 BTC and 301,000 ETH tokens have been distributed among creditors without any operational issues. However, former Celsius users who made withdrawals from the platform in the 90 days leading to the bankruptcy were reminded that they may need to return part of the funds they withdrew before their claims can be fully distributed.
Celsius filed for bankruptcy in 2022 and faced lawsuits, including one from the SEC alleging fraudulent and unregistered sales of “crypto asset securities.” The company emerged from bankruptcy in November after a restructuring plan was approved by the court.
The recent update from Celsius’ legal team, Kirkland & Ellis, provides insight into the progress of creditor distributions outlined in the restructuring plan. The distributions are facilitated through PayPal for holders in the United States and Coinbase for overseas holders.
While significant progress has been made in distributing crypto assets to eligible creditors, challenges remain for some account holders. Those who did not agree to the restructuring plan may not receive distributions until their individual claims are resolved. Additionally, certain account holders may face challenges in receiving their distributions if issues such as Anti-Money Laundering (AML) compliance are flagged by distribution agents.
