Celsius’ Bankruptcy Plan Administrator Disburses Over $2.5B to Creditors

The bankruptcy administrator disclosed in a recent filing that defunct crypto lender Celsius has distributed more than $2.53 billion to some 251,000 creditors.

The distribution process began in January after the firm emerged from Chapter 11 bankruptcy. Notably, the payouts are based on cryptocurrency prices as of Jan. 16, 2024.

Details of the Distribution

The disbursements were made in liquid cryptocurrency and cash. They cover roughly two-thirds of all eligible creditors of the crypto lender by number and about 93% of the eligible value. 

This comprises $1.43 billion in cryptocurrencies via PayPal/Venmo, $917 million in crypto through Coinbase, and $178 million in cash transfers. 

However, another 121,000 eligible creditors, with an average distribution of approximately $1,500, have yet to successfully claim their distributions. 

The Plan Administrator explained that this is due to the process’s complexity, such as opening an account at PayPal with a matching date of birth, opening an account at Coinbase with a matching e-mail address and date of birth, and providing the PostEffective Date Debtors with accurate wire instructions and a mailing address for a check. 

“Approximately 64,000 of these remaining creditors have a distribution of less than $100, and approximately 41,000 more have a distribution of between $100 and $1,000. Given the small amounts at issue for many of these creditors, they may not be incentivized to take the steps needed to successfully claim a distribution”, the filing said.

The Plan Administrator claims to have attempted more than 2.7 million distributions in total to the 372,000 creditors in over 165 different countries.

Celsius’ Bankruptcy Ordeal 

Celsius filed for bankruptcy in 2022 following a severe liquidity crisis caused by market volatility. The crypto lender emerged from bankruptcy in November.

The company began distributing $3 billion worth of cryptocurrency and fiat to its creditors earlier this year after officially resolving its Chapter 11 bankruptcy. As part of Celsius’ approved reorganization plan, some funds were also used to establish Ionic Digital, a bitcoin mining company owned by creditors. 

Earlier this month, Celsius filed a lawsuit against Tether, claiming that the stablecoin issuer mismanaged over $2 billion worth of bitcoin, worsening the network’s financial troubles and contributing to its bankruptcy.