In its ongoing bankruptcy proceedings, crypto lender Celsius has returned an estimated $2.53 billion to 251,000 of its creditors. This reimbursed amount, disclosed in an August 26 court statement, constitutes roughly 84% of the $3 billion owed by the defunct lender to a total of 375,000 creditors. The move marks a significant advancement in the crypto industry’s expansion and coincides with the unfolding bankruptcy case of the Mt. Gox crypto exchange.
Not all creditors are actively seeking out their reimbursement due to the small amounts owed to them. The court document reveals that of the remaining 121,000 creditors who haven’t received their funds, almost 64,000 are owed less than $100 worth of cryptocurrency, and 41,000 are owed between $100 to $1,000. The trivial sums these creditors are owed may not be motivating them enough to initiate the claim process.
The bankruptcy administrator plans to continue attempting distributions to these creditors every fortnight using Coinbase, with PayPal claim codes continually redeemable for credits. To date, the administrator has executed over 2.7 million such distribution attempts for the current batch of 372,000 eligible creditors.
Celsius had filed for bankruptcy in July 2022, one month after suspending user withdrawals. The company stated that this suspension would allow it to more effectively meet its withdrawal obligations over time, after the company’s native token, Celsius (CEL), suffered severe depreciation in 2022.
The bankruptcy came with a $4.7 billion fine from the U.S. Federal Trade Commission for Celsius, alongside settlements with the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. Former CEO Alex Mashinsky faced arrest and charges including financial fraud, CEL price manipulation, and misleading Celsius’s customers. Mashinsky has refuted these charges and is awaiting trial in September on a $40 million bond.