Celsius will disburse another $127 million from its legal recovery account

Bankrupt crypto-lending firm Celsius has announced plans to distribute an additional $127 million to creditors.

The company’s estate disclosed that this distribution will be made from its “Litigation Recovery Account” and will benefit plaintiffs in specific classes.

Distribution details

According to a Nov. 27 filing, the funds will be disbursed to those with claims in classes 2, 5, 7, 8 and 9. These include retail borrower deposit claims, general earnings claims, withholding claims, unsecured loans and general unsecured loan applications. claims

Eligible creditors can expect payment in Bitcoin or cash, depending on their qualifications. In addition, the distribution will follow the same payment methods used during a financial year prior to August: PayPal, Venmo or Coinbase.

Lenders who do not have a verified account with these platforms will receive cash payments. Corporate claimants may also be paid, although those with convenience claims will be excluded from this round.

“As a result of the second distribution, each eligible creditor will receive a cumulative distribution in cash or liquid cryptocurrency equal to approximately 60.4% of the value of such creditor’s claims as of the petition date,” the firm said .

The first round of payments saw Celsius return $2.53 billion to 251,000 creditors, representing 57.65% of total claims. This second payment will cover 60.4% of eligible claims, with the amount to be received based on a BTC price of $95,836.23.

Update of complaints and judgment

While the latest development is positive for many lenders, some users have expressed their dissatisfaction with the amount they receive. AX, a former Celsius client noted that they are still short six figures after payments.

Another investor, identified as JCH, lamented losing 8 BTC due to Celsius’ collapse, adding that he would have been a millionaire today had the company not failed. JCH later described the payment as “peanuts”, expressing frustration at the limited amount they got.

After Celsius collapsed in 2022, its former CEO, Alex Mashinsky, was arrested and charged with fraud in July 2023 for allegedly misleading depositors about the risks associated with investing in the platform.

The former executive will face trial on January 28, 2025, with a pretrial hearing scheduled for January 16. A federal court recently denied his request to dismiss fraud charges related to the company’s collapse.

Judge John Koeltl ruled that the legal team’s arguments to dismiss the charges were “either moot or without merit.” The verdict leaves seven charges in the indictment that Mashinsky will face at his next trial.

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