Bankrupt crypto lender Celsius Network is gearing up plans to begin the second phase of its payback under the bankruptcy proceedings. According to details filed at the court, the platform will pay $127 million, representing about 2.75% of its total creditor claims. The distribution will now put the total payback in a region around 60% of the total fund.
Celsius Network filed for bankruptcy in 2022 and has already returned about $2.5 billion to more than 200,000 creditors. The repayment, under the first phase, took place in August and cleared about 57% of the total claims. According to the court filings, the second phase payments will be majorly crypto assets, involving mostly Bitcoin which is priced at $95,000 per token. However, creditors will determine if they want to be paid in cash or crypto like in the first phase.
Celsius Network kickstarts second phase repayments
According to Celsius Network, eligible creditors must complete KYC/AML requirements on their accounts. Meanwhile, corporate entities will sign a form noting their preferred payment method. However, the statement mentioned that if they refuse to fill out the form, they’ll be paid in cash. Individuals who also chose crypto will receive the BTC equivalent of their payments.
Users who chose the cash payment option will be paid in cash after an equivalent of their payments in Bitcoin is sold. The funds will be made available via different means such as wire transfer, check, or through other methods like PayPal, Coinbase, and Venmo. The loan claim is for all types of creditors including creditors with general earn claims, retail deposit claims, and others. However, entities with Convenience Class claims and those contesting their claims are not eligible.
Meanwhile, some creditors will recover their claims through the platform’s former mining network Ionic Digital. Some creditors, excluding the convenience class, have shares in the mining network, ramping up plans to go public next year. The company was in the news for a while due to some new faces among its leadership. After the departure of its former general counsel Charles Amman, Laura Schnaidt was appointed to the role.
Although there has been no news surrounding Ammann’s departure, the timing has caused rumors to start flying. This is because the exit came at the same time as that of the company’s directors H. MacIntyre Gardner and Emmanuel Aidoo. Gardner’s exit came as a surprise, having joined the company recently. With the departure of its executives and its auditor’s resignation, there are rumors about whether the firm can still go public next year.
Other crypto companies speed up repayments
Celsius Network is not the only firm tied up in repayments, as a few other bankrupt firms are returning a substantial part of their customers’ funds. Firms like Voyager Digital and BlockFi have made considerable efforts to repay some of their creditors, with others noting that they are yet to be paid.
Still, others have not started repayments. FTX and Three Arrows Capital (3AC) are yet to make repayments after filing for Bankruptcy. However, reports indicate that FTX is moving to finalize repayment plans with its creditors. Meanwhile, the individuals tied to the bankruptcies have been tried, with some convicted. For instance, all the key executives tied to FTX’s collapse have been tried and convicted. While the FTX executives are in prison, Celsius boss Alex Mashinsky will face fraud charges in 2025.
The post Celsius initiates a $127 million payback as part of its bankruptcy repayments first appeared on Coinfea.
