Celsius, a crypto loan platform that went bankrupt in July 2022, has begun dispersing crypto assets with a value of $3bn among the creditors as part of a court-approved plan. The company has already paid back $2bn to its liabilities, including over 20k Bitcoin (BTC) and 301k Ethereum (ETH) owners, according to the latest court documents.
A confirmation was made by Kirkland & Ellis law firm that about 75% of the BTC/ETH distribution will be done through such commonly used platforms as PayPal, Venmo, and Coinbase; Celsius has sent a total of 20,200 Bitcoins (BTC) and 301,300 Ether (ETH) to 171,672 creditors to date.
The rest of the creditors, who hold other crypto assets or live in areas where checks are not supported, will have different methods for being reimbursed by Celsius. From Odyssey Transfer and Trust Company, the transfer agent, those who have a right to the shares of Ionic Digital, which is a new mining company formed by Celsius, receive an email containing directions on how they can claim their own shares.
However, it is important to understand that not every creditor will be satisfied with this repayment program. Specifically, anyone who had withdrawn over $100,000 by the time bankruptcy was declared must pay back any excess amount they took out or risk facing sanctions. In particular, Celsius has claimed that these withdrawals were not legitimate and that they led to its insolvency.
Celsius Creditor Distribution Marks The End Of An Era
To pay off its creditors, Celsius is giving back 3 billion dollars in cryptocurrency, meaning that one of the first lenders in the digital lending services is now history. It was founded in 2017 and presented as providing high interest rates and low fees for its clients through lending its cryptos to the institutions that need them. In addition, they said that they had more than a million users with $17 billion in assets under management at its highest point.
However, Celsius’ business model has revealed itself to be unsustainable and dangerous in terms of exposing it and its users to high volatility and counterparty risk. As of the beginning of 2024, the company left bankruptcy proceedings, and now it is committed to debt settlement. The fintech firm is also due to shut down its mobile app and website by 28th February 2024, with all activities being stopped completely.
PayPal, Venmo, and Coinbase facilitate Celsius’s debt distribution. They promise to pay back the creditors’ money on time by using their most secure channels. The repayment plan has received mixed reviews from those who have waited for over a year to get their funds back. Some are relieved and thankful, while others are angry and let down.
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