Celsius Network has revealed it has repaid over $2.5 Billion to creditors.
Celsius Network was one of the major lenders to go bankrupt in 2022.
This repayment spells a good omen for FTX creditors still hoping to get paid.
Celsius Network Limited says it has distributed over $2.53 billion as part of its bankruptcy proceedings.
The payment was made in cryptocurrency and cash to about 251,000 creditors through its bankruptcy administrator. The payouts were based on market price as of January 16, 2024.
In a court document filed with the United States Bankruptcy Court Southern District of New York, the distribution thus far has covered over 66% of creditors in terms of numbers and 93% of eligible value.
It stated that while efforts were made to clear the remaining, about 121,000 creditors failed to claim their payouts. These categories of creditors have an average disbursement of about $1,500.
Celsius’ Breakdown of Creditor Payments
Meanwhile, as shown in the court filing, more than half of these creditors, about 64,000 users, have disbursements less than $100 in value. An additional 41,000 have their distributions valued at between $100 and $1,000.
According to Celsius, this group of creditors may not move to successfully submit a claim due to the relatively small amounts involved.
However, it emphasized that the administrator attempts to disburse using Coinbase every two weeks. Notably, cash distributions are scheduled for each week. Additionally, any PayPal claim code remains redeemable at any time once issued.
Cumulatively, the administrator has tried 2.7 million distributions for about 372,000 currently eligible creditors. This is in addition to several reattempts for nearly all of the creditors who are yet to successfully receive some payments.
Celsius Legal Battle with Tether Over $2.4 Billion Bitcoin Collateral
In an earlier filing this month, Celsius instituted legal action against Tether. This filing was lodged at the U.S Bankruptcy Court for the Southern District of New York, targeting to retrieve Bitcoin valued at about $2.4 billion, as reported by Bitcoinworld.
In the lawsuit, the company alleged that Tether liquidated Celsius’ collateral during the bear market in 2022.
In response, Paolo Ardoino, Tether’s CEO, maintained his company committed no wrongdoing and Celsius’ legal move was a “baseless shakedown.”
In 2022, Tether made available USDt to some of its customers – including Celsius. Tether's arrangements with customers are very simple: Tether provides USDt to selected customers who provide an overcollateralization in Bitcoin.
If the price of bitcoin (the collateral) falls… https://t.co/UuEs1ig8zr
— Paolo Ardoino (@paoloardoino) August 10, 2024
He insisted that the decision to liquidate the disputed assets was in line with the contractual agreement reached with Celsius. He claimed that Tether merely acted to protect its interests.
Ardoino asserted there were loopholes in the Celsius filing and remains confident Tether acted per the contract.
He said,
“This lawsuit will be fought till the end. It’s important to set an example on behalf of the entire industry that shameless money grabs will not work. Bullying never scares us. we’re very confident in being able to demonstrate the correctness of our actions in court.”
What Hopes for Bankruptcy Repayments?
In recent times, the broader cryptocurrency ecosystem has seen notable firms go bankrupt, with users suffering losses.
For instance, in the last quarter of 2022, FTX Exchange filed for Chapter 11 bankruptcy, and since then, the hopes of repayment to all creditors remain debated.
In its efforts, the bankrupt exchange has moved to reclaim donations made by Sam Bankman-Fried while he was CEO.
FTX creditors have not been settled, and a recent update reveals a group of creditors has objected to reorganization plans. Experts believe bankruptcy claims in the industry remain a tough nut to crack and many investors usually bear the brunt.