Celsius has finally made significant progress in its bankruptcy case, repaying two-thirds of its eligible customers. The company has returned around $2.53 billion to 251,000 creditors. This repayment covers about 84% of the $3 billion in assets it owed to over 375,000 creditors.
The recent bankruptcy payments are a great sign for the growing crypto industry. They come alongside the bankruptcy case of the Mt. Gox exchange, where over $9.4 billion in crypto was owed to 127,000 creditors. After a decade of waiting, these creditors are finally starting to get back their assets.
Not all creditors are rushing to claim their cryptocurrency, partly because the amounts involved are relatively small. Out of the 121,000 creditors still waiting to claim their funds, about 64,000 are owed less than $100 each. Meanwhile, the filing reveals creditors owe between $100 and $1,000 to 41,000 individuals.
The bankruptcy administrator will try to distribute payments to these creditors through Coinbase every two weeks. Meanwhile, PayPal claim codes can be redeemed for credits at any time. The administrator mentioned they’ve made over 2.7 million distribution attempts for the roughly 372,000 currently eligible creditors.
The Celsius bankruptcy drama: Key insights
In July. 2022, Celsius filed for bankruptcy, just a month after it stopped users from withdrawing their funds. The company explained that this pause aimed to improve its ability to meet withdrawal obligations over time, following a sharp drop in the value of its token, Celsius (CEL).
Its bankruptcy led to paying $4.7 billion in fines to the Federal Trade Commission. Furthermore, it reached settlements with the Department of Justice, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.
The former CEO of Celsius, Alex Mashinsky, was recently arrested and charged with financial fraud, manipulating the price of CEL, and misleading customers. He has pleaded not guilty to the charges and is currently out on a $40 million bond. His trial is set to begin in September.
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