Celsius has repaid two-thirds of its eligible customers as part of its ongoing bankruptcy proceedings.
According to an Aug. 26 court filing, the bankrupt crypto lender has repaid approximately $2.53 billion to 251,000 creditors. This amount represents about 84% of the $3 billion owed by the defunct crypto lender to over 375,000 creditors.
These bankruptcy payments are seen as a positive development for the growing crypto industry. They come at a time when the bankruptcy proceedings of the Mt. Gox exchange, which owed over $9.4 billion in crypto to 127,000 creditors, are also underway. After ten years, Mt. Gox creditors are finally beginning to recover their assets.
Interestingly, not all creditors are actively seeking to claim their cryptocurrency due to the relatively small amounts they are owed. Of the remaining 121,000 creditors who have yet to claim their funds, around 64,000 are owed less than $100 worth of crypto, while 41,000 are owed between $100 to $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 bankruptcy administrator plans to retry distributing funds to these creditors through Coinbase every two weeks, while PayPal claim codes will remain redeemable for credits at all times. The administrator noted that it “attempted more than 2.7 million distributions in total for the approximately 372,000 currently eligible creditors.”
Celsius filed for bankruptcy in July 2022, a month after pausing user withdrawals. The company claimed the pause was necessary to put it in a “better position to honor, over time, its withdrawal obligations” after the value of its native token, Celsius (CEL), plummeted in 2022.
Celsius’ bankruptcy involved settling $4.7 billion in fines with the United States Federal Trade Commission, as well as reaching settlements with the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
Former CEO Alex Mashinsky was arrested and charged by federal prosecutors with financial fraud, manipulating CEL’s price, and misleading Celsius customers. Mashinsky has pleaded not guilty and is currently out on a $40 million bond pending his trial in September.
