Celsius starts creditor payout with bankruptcy ending soon

Celsius Network (CRYPTO:CEL), the bankrupt cryptocurrency lender, has made significant progress in its creditor distribution process, moving closer to concluding its bankruptcy proceedings. 

The company has successfully distributed 93% of the approved $3 billion in cash and cryptocurrency to over 251,000 creditors across 165 countries. 

This distribution amounts to more than $2.53 billion in liquid assets, marking a critical milestone in the company's reorganisation plan.

The distribution follows the approval of Celsius' reorganisation plan by the U.S. Bankruptcy Court for the Southern District of New York and the U.S. Securities and Exchange Commission earlier this year. 

The plan, which began around January 31, 2024, involves distributing approximately $3 billion in cash, crypto, and shares of Mining NewCo, a Bitcoin (CRYPTO:BTC) mining and staking entity that Celsius will transition into once the bankruptcy proceedings are fully resolved.

Celsius' plan initially aimed to distribute assets to 375,000 creditors worldwide. 

As of now, two-thirds of all eligible creditors have received the bulk of their claims, with 93% of the value already distributed.

However, the process has not been without challenges.

Some creditors have faced difficulties completing necessary procedures, such as setting up PayPal or Coinbase accounts with matching dates of birth and email addresses, which has delayed their ability to redeem their crypto holdings.

In addition to these procedural hurdles, a significant number of creditors have small claims that have further complicated the distribution process.

Of the 121,000 creditors who have not yet received their distributions, approximately 64,000 have claims under $100, while 41,000 have claims between $100 and $1,000.

Despite these challenges, Celsius has been diligent in addressing distribution-related issues, including failed redemptions.

The company reattempts distributions through Coinbase every two weeks and processes cash distributions weekly, while ensuring that PayPal claim codes remain redeemable.

Celsius has also reassigned creditors who encountered difficulties with their initially assigned distribution agents, transferring them to more reliable platforms like Coinbase to increase the success rate of distributions.

Since the process began, Celsius has made over 2.7 million distribution attempts and processed 26 wire transfer cohorts for eligible creditors, signaling its commitment to resolving outstanding claims as it nears the end of its bankruptcy proceedings.

At the time of writing, the Celsius Network price was $0.1533.