CDS Crypto News Celsius Bankruptcy: Second Round of Payments to Creditors Begins
Crypto News

Celsius Bankruptcy: Second Round of Payments to Creditors Begins

64
Celsius Bankruptcy: Second Round Of Payments To Creditors Begins

Celsius Bankruptcy: $127 Million Second Payout for Creditors

Celsius BankruptcyCelsius Network, the now-defunct cryptocurrency lender, has announced a significant step in its ongoing bankruptcy proceedings, with a second payout totaling $127 million set to be distributed to eligible creditors. This comes after the company filed for bankruptcy in 2022, following the discovery of a $1.2 billion shortfall on its balance sheet. The new distribution will bring the total payout to affected creditors closer to recovery, as Celsius works through its restructuring process.

Celsius Bankruptcy Plan: Second Distribution Details

According to a court filing submitted on Wednesday, Celsius will be distributing approximately 60.4% of the total value of claims for each eligible creditor. The payment will either be made in cash or liquid cryptocurrency, depending on the creditor’s preferences and eligibility. The weighted average price of Bitcoin for this second payout has been set at $95,836.23, reflecting the current market conditions.

The filing further stated that creditors who are unable to receive the payout in cryptocurrency via the designated distribution agent will instead receive their share in cash. This distribution is part of Celsius’s broader efforts to return value to its creditors following the company’s collapse in 2022.

First Payout Recovery Rate and Celsius’s Ongoing Efforts

This second payout follows the first distribution, which took place earlier this year in January. At that time, Celsius distributed $2 billion worth of cryptocurrencies to over 171,000 creditors. That first payout achieved a recovery rate of 57.65% for eligible claims, meaning creditors were able to recoup just over half of the value they had lost. Celsius’s bankruptcy plan administrators are continuing their efforts to wind down the company’s operations and repay creditors as much as possible.

Despite the progress, Celsius’s bankruptcy proceedings remain complex, and many creditors are still waiting for full compensation. The company, once a leading player in the crypto lending space, filed for bankruptcy after facing massive liquidity issues and a significant hole in its balance sheet.

Legal Challenges for Celsius and Former CEO Alex Mashinsky

The Celsius bankruptcy has also led to ongoing legal issues for the company and its former CEO, Alex Mashinsky. In addition to the bankruptcy filings, both Celsius and Mashinsky were sued by U.S. regulators, including the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and the Commodity Futures Trading Commission (CFTC), for allegedly misleading customers.

Mashinsky has been charged with fraud and could face a maximum prison sentence of up to 115 years if convicted. In early November, a U.S. district judge rejected Mashinsky’s request to have two fraud charges dismissed, meaning the case will proceed through the courts.

What’s Next for Celsius Creditors and Investors

The ongoing payout distributions provide some relief to creditors who were affected by Celsius’s collapse, but the company’s bankruptcy proceedings are far from over. Creditors who have not yet received full compensation will need to continue monitoring the situation, as further payouts may be made in the coming months.

However, with the legal proceedings still unfolding, the future of Celsius and its ability to repay creditors in full remains uncertain. Investors and creditors who had exposure to the crypto lending platform may want to stay informed about further developments, particularly regarding the legal battles facing Mashinsky and other company executives.

Ongoing Bankruptcy Process and Recovery

Celsius’s bankruptcy case is an ongoing process that continues to unfold as creditors receive partial payouts. While the second distribution marks a step forward in the recovery process, full compensation for all affected parties is still a work in progress. For creditors, it is crucial to stay updated on the situation as the company navigates its remaining obligations.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.

Umac Stock- Unusual Machines Appoints Donald Trump Jr. As Advisor

Leave a comment

Leave a Reply

Related Articles

ETH Price Predictions: Will It Soar to $15,000 by 2025?

Ethereum's price could soar to $7,600 or even $15,000 by 2025, following...

Bitcoin Reaches $100,000: A Historic Moment

Bitcoin has surged from $0 to $100,000 in 15 years, reaching a...

Ethereum ETFs Hit $83.8 Million in Inflows, Boosting Ethereum’s Price

U.S.-based spot ether ETFs have recorded ten consecutive days of positive inflows,...

Bitcoin Price Surge: BTC Reaches $100,000 Despite Global Asset Declines

Bitcoin reached a historic $100,000 milestone on December 6, despite global asset...