TL;DR
- Celsius will distribute an additional $127 million to its creditors, coming from the “Litigation Recovery Account,” benefiting specific classes of creditors.
- Payments will be made through PayPal, Venmo, or Coinbase, and those without verified accounts will receive cash payments. Some corporate creditors will also receive funds.
- Despite the distribution, several users on social media expressed frustration, considering the payments insufficient compared to what was lost.
The bankrupt crypto lending platform Celsius has announced a new distribution of funds for its creditors, totaling $127 million from its “Litigation Recovery Account.”
The distribution will benefit creditors classified in classes 2, 5, 7, 8, and 9, which include retail borrowers and Earn program users, as well as those with unsecured claims. The distribution will not cover users with convenience claims or those without illiquid recovery rights.
Celsius will soon begin a second distribution of $127 million made available from the Litigation Recovery Account to eligible creditors (Classes 2, 5, 7, 8, and 9). Distributions will be made in BTC or USD, based on eligibility. For more details, please refer to this notice:…
— Celsius (@CelsiusNetwork) November 27, 2024
Payments will be made using the same methods as the first distribution: PayPal, Venmo, or Coinbase. Those who do not have a verified account on these platforms will receive their payment in cash. Additionally, some corporate creditors will also be able to access these funds, but those with convenience claims will be excluded from this process.
Dissatisfaction with the Payments to be Made by Celsius
Although the news has been received with some relief by creditors, several reactions on social media reflect dissatisfaction with the amount of the payments. Some investors who lost significant sums on the platform have expressed frustration, arguing that the payments are insufficient compared to what they lost. One user, for example, mentioned losing 0.7 BTC and several tokens, which has caused a sense of injustice for not recovering what was expected.
Celsius, which declared bankruptcy in July 2022, continues to deal with the aftermath of its collapse, which affected thousands of users and investors. In July 2023, its former CEO, Alex Mashinsky, was arrested and charged with fraud for allegedly deceiving depositors about the risks associated with investing on the platform. His trial is scheduled to begin in January 2025.
It is worth noting that in March of this year, some corporate creditors pointed out that the payments they received were 30% lower due to Celsius’ exclusive reliance on Coinbase to process the distributions, which has generated more complaints among those affected by the bankruptcy
