Bankrupt crypto lender Celsius Network has completed the payouts to two-thirds of the creditors despite the challenges of the distribution process. In its first report, the plan administrator detailed the status of the distribution plan and the following steps for the repayment process.
Celsius Distribution Plan Targets 375,000 Creditors
On Monday, Celcius’ plan administrator offered its first Status Report on distributions to the US Bankruptcy Court for the Southern District of New York. In the court document, the administrator revealed that, by August 2024, Celsius had successfully distributed over $2.5 billion of the eligible value owed to creditors.
In the last seven months, the plan administrator has worked to make successful distributions to creditors, answer questions, and resolve issues experienced by Celsius customers. According to the report, the distribution plan is “likely the most complicated and ambitious distribution process ever attempted in a Chapter 11 case.”
The plan seemingly required months of diligence, evaluation, and collaboration between Celsius’ bankruptcy administrator and several advisors as it involves the distribution of “Liquid Cryptocurrency, Cash, and for those creditors outside of the Convenience Class, MiningCo Common Stock.”
The repayments are done through Coinbase, PayPal, Venmo, and other platforms. The administrator tries distributions through Coinbase every two weeks, and cash distributions are attempted once per week. Meanwhile, PayPal claim codes can be redeemed at any time once issued.
In total, approximately 375,000 creditors in over 165 different countries were eligible for the repayments, which increased the complexity of the distribution process. Per the court document, the distribution plan’s difficulty increased as many regulators pursued enforcement actions against Celsius for not being a “fully regulatory compliant business.”
$2.5 Billion Sent To Creditors
Since January 31, Celsius has successfully made distributions to 251,000 creditors. This number represents around two-thirds of all eligible creditors and approximately 93% of the eligible value.
Despite the challenges, the bankrupt crypto lender has progressively made payouts worth around $2.53 billion in cash and cryptocurrencies at prices set on January 16, meaning that the initial distribution to eligible creditors has been successful “for a substantial majority of creditors.”
Distribution plan's progress by August, 2024. Source: Celsius' Plan Administrator Status Report
In the first two weeks of distribution, Celsius creditors received approximately 65% of all the eligible value, worth around $1.7 billion. This number increased to 80% of the then-eligible value a month later, which accounted for approximately $2 billion.
Since March, the crypto lender has distributed approximately 30%-40% of the remaining amount, leaving around 121,000 eligible creditors. Nonetheless, the remaining creditors reportedly have “overwhelmingly small distributions,” which might not incentivize them to go through the repayment process.
Per the report, of the 121,000 remaining creditors, 64,000 have a distribution of less than $100. Meanwhile, 41,000 creditors have between $100 and $1,000 distributions. Ultimately, “the Plan Administrator has attempted more than 2.7 million distributions in total for the approximately 372,000 currently eligible creditors” and will continue retrying repayments according to the plan.
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