Celsius Bankruptcy: $2.53 Billion Distributed to Creditors Amid Ongoing Claims

Celsius Bankruptcy Update: Significant Disbursements to Creditors

The bankruptcy administrator for Celsius has recently reported that over $2.53 billion has been allocated to approximately 251,000 creditors. This information was disclosed in the administrator’s inaugural status report regarding the distribution of funds. The disbursements were executed in liquid cryptocurrency and cash, reflecting the valuations as of January 16. Notably, these distributions encompass about two-thirds of all eligible creditors based on their numbers, and an impressive 93% of the total eligible value, as highlighted in a court filing made by the administrator on Monday.

Despite these considerable distributions, there remain around 121,000 eligible creditors who have yet to successfully claim their respective distributions, which average about $1,500. The filing further elaborated, stating, “Approximately 64,000 of these remaining creditors have a distribution of less than $100, while an additional 41,000 have distributions ranging between $100 and $1,000.” The administrator expressed concerns regarding the motivation of these creditors to undertake the necessary steps to claim their distributions, given the relatively modest amounts at stake.

In an important development, the bankruptcy case has now been officially closed following the approval of a reorganization plan by the United States Southern District of New York Bankruptcy Court in November. This plan, which aims to distribute over $3 billion to Celsius creditors, was finalized at the end of January. Over the past seven months, the filing described the distribution process as likely the most intricate and ambitious undertaking ever seen in a Chapter 11 case.

The comprehensive plan involves the allocation of liquid cryptocurrency, cash, and shares in MiningCo—the newly formed entity that emerged from Celsius—to a total of around 375,000 creditors spread across more than 165 countries. The complexity of this distribution process has been exacerbated by the fact that “Celsius was not a fully regulatorily compliant business prepetition, and numerous regulators were pursuing enforcement actions against the Debtors,” as stated in the filing.

In a related matter, earlier this month, Celsius made a formal request to the bankruptcy court, seeking an order for Tether to release bitcoin valued at approximately $3.3 billion. This request is based on allegations that Tether labeled the situation as a “shakedown” and intends to vigorously contest the claims.