Celsius is preparing for a second distribution of $127 million for eligible creditors from its Dispute Recovery Fund.
This amount will be distributed in the form of Bitcoin (BTC), Ethereum (ETH), or US dollars (USD), depending on the conditions of each recipient.
Hope for Celsius creditors
According to the latest filings from the bankruptcy court, the Dispute Administrators have allocated approximately $127 million, after deducting fees and expenses, for this second payment.
This amount will be transferred to creditors after the effective date and creditors under the company's bankruptcy plan. A portion of the fund will be retained in reserves as stipulated in the plan.
Notably, creditors wishing to receive their distribution in BTC or Ethereum (ETH) must have an active Coinbase account. Account details must match the information recorded in Celsius's records.
"According to the agreement with Coinbase, after November 9, 2024, individual creditors who have not received a distribution from Celsius via Coinbase will automatically be converted to a distribution partner in US dollars (USD)," Celsius announced on X.
Meanwhile, the legal issues surrounding former CEO Alex Mashinsky continue. Earlier this month, a federal court denied Mashinsky's request to dismiss two fraud charges related to the collapse of Celsius.
These charges include market manipulation related to the CEL token. The court allowed the lawsuit to proceed based on the Commodity Exchange Act and the Securities Act.
Mashinsky is facing seven criminal charges related to the company's collapse in 2022. If convicted, he could face a prison sentence of up to 115 years.
Earlier this year, Judge Kaplan in the United States summoned Sam Bankman-Fried to court to address potential conflict of interest concerns related to his legal team. Prosecutors raised issues regarding Bankman-Fried's attorney, who previously represented Alex Mashinsky.
The law firm Kirkland & Ellis, which manages bankruptcy cases for Celsius, BlockFi, and Voyager Digital, is reported to have earned over $120 million in fees for its work.
Overall, the bankruptcy story of Celsius seems to be gradually coming to an end. The 2022 cryptocurrency winter affected many users, with some suffering heavy losses. However, this latest repayment may help alleviate their difficulties. The trial of former CEO Mashinsky is expected to begin in January 2025.