Celsius Network, the bankrupt crypto lending firm, has announced a second creditor payout of $127 million. This move is a significant step in rebuilding trust and refunding creditors following its 2022 collapse.
Celsius's Second Creditor Payout
This week's court filing revealed that Celsius will allow creditors to recover approximately 60.4% of their claims. Payments will be available in liquid cryptocurrency or cash, depending on each creditor’s accessibility. Bitcoin payouts are calculated using a weighted average price of $95,836.23 per BTC, highlighting Celsius's structured approach to this process.
Initial Payout Phase
Earlier this year, Celsius distributed over $2 billion in cryptocurrencies to more than 171,000 creditors, covering 57.65% of claims. Despite this effort, it failed to fully address the financial damage. The second payout aims to continue this recovery effort, but full restitution remains uncertain. Celsius filed for bankruptcy in July 2022 after a shocking $1.2 billion deficit.
Former CEO's Legal Challenges
Former Celsius CEO Alex Mashinsky faces legal battles over fraud and misleading customers about investment risks. The SEC, FTC, and CFTC are involved. His case is complicated by a recent denial of his motion to dismiss two fraud charges.
The $127 million second payout is a significant step for Celsius Network creditors. However, full creditor reimbursement is still a long way off, and legal issues remain unresolved.
