Celsius bankruptcy distributions exceed $2.5 billion to 251,000 creditors

Defunct centralized crypto lender Celsius has now distributed over $2.53 billion in liquid cryptocurrency and cash owed to its creditors — some 93% of the eligible $2.73 billion value. 

Roughly 251,000 of 372,000 (68%) total eligible creditors from 165 countries have now received distributions, the firm claims, with the remainder mainly involving smaller amounts, Celsius’ bankruptcy plan administrator confirmed in a status report filed late Monday.

This includes $1.43 billion in crypto via PayPal/Venmo, $917 million in crypto via Coinbase and $178 million in cash transfers. Celsius started the process on Jan. 31, and reached $2 billion worth of distributions by February, The Block previously reported . The payouts are based on cryptocurrency prices as of Jan. 16, 2024.

Around 121,000 creditors are yet to successfully claim a distribution due to the complexity of the process, “such as opening an account at PayPal with a matching date of birth, opening an account at Coinbase with a matching e-mail address and date of birth, or providing the PostEffective Date Debtors with accurate wire instructions and/or mailing address for a check,” the filing states.

However, most of the remaining creditors relate to small distributions, with around 64,000 owed a distribution of less than $100 and 41,000 between $100 and $1,000, according to the filing. “Given the small amounts at issue for many of these creditors, they may not be incentivized to take the steps needed to successfully claim a distribution,” the filing adds.

The Plan Administrator claims to have attempted more than 2.7 million distributions in total for the 372,000 creditors, typically retrying distributions via Coinbase every two weeks and cash distributions once per week, including “numerous reattempts for nearly all of the creditors who have not yet successfully received a distribution.”

As part of Celsius’ approved reorganization plan , some funds were also used to establish a new bitcoin mining company, Ionic Digital. Certain Celsius creditors will own the mining company through common shares, which are expected to be publicly traded once the company secures necessary approvals. Miami-based mining company Hut 8 will oversee Ionic’s mining operations under a four-year management agreement.

Celsius’ bankruptcy

Celsius filed for bankruptcy in 2022 following the discovery of a $1.2 billion hole in its balance sheet. The company made its way out of bankruptcy in November.

Last year, Celsius and its founder and former CEO Alex Mashinsky were sued by several regulators — including the Securities and Exchange Commission, the Federal Trade Commission and the Commodity Futures Trading Commission — for allegedly misleading customers. Mashinsky was also charged with fraud. His trial is scheduled to start on Sept. 17.

Celsius recently targeted Tether, Badger DAO, Compound and Israeli Prime Minister Benjamin Netanyahu’s niece and nephew in lawsuits attempting to claw back billions of dollars in funds for creditors.