As a seasoned crypto investor with a knack for navigating the digital financial wilderness, I find the latest developments at Celsius Network both encouraging and somewhat perplexing. While it’s reassuring to see over $2.53 billion being returned to creditors, the complexity of the process is not unexpected given the nature of the beast we’re dealing with – cryptocurrencies!
The failed cryptocurrency loan company, Celsius Network, has published its initial report detailing the distribution of assets to creditors. It’s been disclosed that impacted individuals have already received more than 2.53 billion dollars worth of liquid digital currencies and cash.
As per court documents filed with the U.S. Bankruptcy Court for the Southern District of New York, over 251,000 creditors received approximately $2.53 billion worth of crypto and cash on January 16, 2024. Celsius is currently working to repay other creditors through their designated representatives.
Celsius Repays $2.53B to 251K Creditors
After obtaining approval for its reorganization plan from both a bankruptcy court and the U.S. Securities and Exchange Commission earlier this year, troubled cryptocurrency company Celsius started distributing funds around January 31. This plan involved the company dispersing approximately $3 billion in cash, cryptocurrencies, and shares of Mining NewCo – a Bitcoin mining and staking company that Celsius plans to transform into once bankruptcy proceedings are finalized.
According to Celsius, approximately 375,000 creditors from more than 165 countries were slated to receive the assets. As of now, about two-thirds of these eligible creditors have been given around 93% of the total value. The distribution process has been ongoing, moving forward over time, despite challenges faced by the creditors.
Creditors are experiencing difficulties when it comes to performing specific tasks such as creating accounts on platforms like PayPal or Coinbase that match their dates of birth and email addresses, which in turn is causing complications for them to redeem cryptocurrencies.
Most of the 121,000 creditors yet to receive their payouts hold relatively small claims, with about 64,000 having less than a $100 claim, and another 41,000 having claims between $100 and $1,000. These creditor groups seem to be disincentivized from proceeding with their redemptions.
Failed Redemptions and Re-Attempts
As long as creditor repayments are ongoing, Celsius is working to resolve distribution problems such as unsuccessful withdrawals. The bankruptcy estate attempts redistributions through Coinbase every two weeks, re-attempts cash distributions weekly, and guarantees that PayPal claim codes can be redeemed promptly after issuance.
As an analyst, I’d rephrase that as: In my analysis, Celsius has transferred creditors who were previously unable to collect their due payments through their original distribution agents onto new platforms. Consequently, some creditors have been shifted from PayPal to Coinbase, which appears to have boosted the success rates of these distributions.
From the start, Celsius has made more than 2.7 million distributions and handled 26 groups of wire transfers for qualified claimants.
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2024-08-28 01:24