Celsius Network: Analyzing the 300% Price Increase of CEL Token
Celsius Network’s native token has experienced a remarkable surge of over 300% within a month following the initiation of a $2.5 billion repayment scheme aimed at over 250,000 creditors.
Significant Repayment to Creditors
A court filing dated August 26 revealed that the bankrupt digital asset lender had repaid approximately $2.53 billion to 251,000 creditors. On that day, data from Cointelegraph Markets Pro indicated that the Celsius (CEL) token was trading at $0.16. By September 23, the token’s price soared to $0.65, marking an impressive 300% price appreciation. Currently, it hovers around $0.58. However, it remains down 1,287% from its all-time high of $8.05, reached in June 2021.
Distribution Details and Remaining Claims
On August 26, Celsius managed to pay approximately 84% of the total owed assets, amounting to $3 billion. While a significant number of creditors have been compensated, some eligible for payment are hesitant to claim their digital assets due to the small amounts owed. According to the filing,
64,000 have less than $100 in assets to claim,
and
41,000 are owed between $100 and $1,000 in crypto.
The filing further stated that the small amounts may deter creditors from taking the necessary steps to claim their funds, noting that
They may not be incentivized to take the steps needed to successfully claim a distribution.
The Bankruptcy Saga of Celsius
Celsius filed for bankruptcy in July 2022, stating its intent to reorganize under Chapter 11. An email sent to users explained that the company had hired bankruptcy specialists shortly before the filing. This bankruptcy has led to fines of up to $4.7 billion from the United States Federal Trade Commission. The company expressed satisfaction with the resolutions reached with various regulatory agencies in the US. Additionally, former CEO Alex Mashinsky was arrested and charged with financial fraud, misleading customers, and manipulating the token’s price.
FAQs
What caused the surge in Celsius Network’s token price?
The CEL token surged over 300% following Celsius’s announcement of a $2.5 billion repayment plan for over 250,000 creditors.
How much has Celsius repaid to its creditors?
As of August 26, Celsius repaid approximately $2.53 billion to 251,000 creditors, covering about 84% of the assets owed.
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