Cryptocurrency lender Celsius recently announced a significant milestone in its post-bankruptcy phase. The company disclosed that the majority of eligible creditors have now received their liquid crypto distributions through its appointed distribution agents, payments giant PayPal, and crypto exchange Coinbase.
The update comes in the wake of a recent court filing submitted by Kirkland & Ellis, the legal representatives of Celsius. This filing sheds light on the progress of creditor distributions as outlined in the restructuring plan, following Celsius’ filing for bankruptcy in July 2022.
According to Kirkland & Ellis, distributions of cryptocurrencies to creditors within the United States are being facilitated by PayPal, while overseas creditors are being managed by Coinbase as the distribution agent.
The legal team revealed that a substantial sum totaling $2 billion worth of crypto assets, including 20,255.66 Bitcoin and Ethereum, has been successfully transferred to creditors who assented to the restructuring plan. However, it was clarified that creditors who did not consent to the restructuring plan will not receive any crypto distribution until the resolution of their individual claims.
Furthermore, the filing emphasized that certain account holders might encounter hurdles in receiving their distributions if flagged for anti-money laundering (AML) or compliance issues by Coinbase or PayPal.
The filing stated, “Distribution Agents have discretion to refuse making distributions to anyone they believe does not fulfill their compliance and other requirements.”
In light of these developments, there has been speculation within the crypto industry regarding the potential impacts of the actions outlined in the restructuring plan on the broader crypto market.
As of January 5th, Celsius initiated the recall and rebalancing of its crypto assets to ensure timely distributions to creditors. However, blockchain analytics firm Nansen highlighted that nearly a third of the Ethereum in the pending withdrawal queue currently belongs to Celsius.
The completion of creditor distributions marks a significant milestone for Celsius as it navigates through its post-bankruptcy phase and strives to address the concerns of its stakeholders and the wider crypto community.
For Celsius and its stakeholders, the successful completion of creditor distributions represents a crucial step forward in the company’s journey towards financial stability and rebuilding trust within the crypto ecosystem.
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