Celsius returns over $2 billion to creditors

Longtime crypto lending platform Celsius Network has begun refunding customers who had assets trapped on the platform. According to its first status report on distributions, the company has already paid out $2.53 billion to creditors.

This amount was distributed among 251,000 Celsius creditors, as detailed in a lawsuit filed in the United States Bankruptcy Court for the Southern District of New York. The value of the cryptocurrencies takes into account their price on January 16, 2024.

Celsius says that total represents two-thirds of the creditors who still have money to collect. About 64,000 of them have amounts owed of less than $100.

Celsius pays $2.53 billion to 251,000 creditors

Earlier this year, Celsius submitted its reorganization plan to the bankruptcy court and the U.S. Securities and Exchange Commission (SEC). Both institutions approved the plan, and returns began on Jan. 31.

Under the plan, the company would return about $3 billion in refunds to customers. Creditors would receive the payments in cash, cryptocurrency and shares of Mining NewCo, a Bitcoin mining and staking entity.

Celsius would cease to exist as a lending platform and would return to the market in the persona of Mining NewCo.

The distribution of assets covers 375,000 creditors in more than 165 countries – around two-thirds of all eligible creditors received 93% of the value. The distribution process has progressed over time, despite the problems faced by the company.

For example, some creditors were unable to complete certain procedures, such as opening PayPal or Coinbase accounts with birth dates and email addresses that matched Celsius’s. As a result, they struggled to receive their payments.

This has led to creditors who have very low amounts to receive giving up. In fact, of the 165,000 creditors, 121,000 have not received their distributions, while 64,000 have claims of less than $100 and 41,000 have amounts between $100 and $1,000.

Failed rescues and attempts

While creditor repayments continue, Celsius continues to address distribution issues, such as failed redemptions. The company’s bankruptcy estate attempts to make distributions through Coinbase every two weeks to verify its accounts.

Additionally, Celsius has reassigned creditors who were unable to receive their refunds through their initially assigned Distribution Agents. This means that some creditors have been moved from PayPal to Coinbase, increasing the success rates of distributions.

Since distributions began, Celsius has attempted more than 2.7 million distributions and 26 wire transfer cohorts to qualified creditors.

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