Celsius is making a second payout to creditors, distributing $127 million as part of its ongoing bankruptcy proceedings.
According to a court filing from Wednesday, eligible creditors will receive 60.4% of the value of their claims, either in cash or liquid cryptocurrency. The value of Bitcoin for payout is set at a weighted average distribution price of $95,836.23.
This follows the first payout earlier this year, where Celsius distributed $2 billion worth of cryptocurrencies to over 170,000 creditors, with a recovery rate of 57.65%. Celsius filed for bankruptcy in 2022 after revealing a $1.2 billion shortfall, and the company officially emerged from bankruptcy in November.
In addition to the bankruptcy proceedings, Celsius and its former CEO, Alex Mashinsky, face legal action from the SEC, FTC, and CFTC for allegedly misleading customers. Mashinsky, who is also facing fraud charges, has been denied a request to dismiss two fraud charges in his case.
Mashinsky was arrested last year on charges of defrauding customers and misleading them about Celsius’ profitability.
Mashinsky stepped down as Celsius CEO in September 2022. In July 2023, he was indicted on seven counts, including securities fraud, wire fraud, and conspiracy to commit fraud related to his activities at the platform. As of now, he remains free on $40-million bail until his trial. The former CEO allegedly earned $42 million in profits from the sale of CEL tokens.
So far, Celsius has repaid nearly $2.53 billion to 251,000 creditors as part of its ongoing bankruptcy proceedings. According to a court filing, this repayment represents about 84% of the $3 billion in assets owed to over 375,000 creditors.
Interestingly, not all creditors are actively trying to claim their cryptocurrency, especially those owed smaller amounts. The filing shows that about 64,000 of the remaining 121,000 creditors have less than $100 worth of crypto, while 41,000 are owed between $100 and $1,000.
The bankruptcy administrator has been working to distribute funds to these creditors through Coinbase every two weeks, with PayPal claim codes available for redemption at any time. The administrator reported making over 2.7 million distribution attempts to the roughly 372,000 eligible creditors.
Earlier in July, a married couple holding corporate accounts with Celsius filed for a second payout. They argue that their payment was reduced by 35% compared to non-corporate accounts.
These Individual Retirement Accounts (IRAs), owned by Sheri Anne Faller and Bernard Jacob Faller, held over $1 million in cryptocurrency before Celsius filed for bankruptcy. According to the bankruptcy plan, their claim was reduced to $634,337.93, which included 7.38 BTC and 123 ETH to be paid out on January 16.
