The post Celsius to Pay $127M to its Creditors, What’s Next? appeared first on Coinpedia Fintech News
Celsius is back in the news. They’re planning to hand out $127 million to creditors. But before the creditors get too excited, it’s not as simple as it sounds. There are some serious rules, legal battles, and a reminder of just how crazy the 2022 crypto crash really was. Let’s break it down.
Who’s Getting Paid?
It is true that Celsius is giving out $127 million, but not everyone gets the same thing. If you’re eligible, you could get Bitcoin (BTC), Ethereum (ETH), or just regular cash (USD). But here’s the thing—if you want BTC or ETH, you need to have a Coinbase account. If not, no worries, you’ll automatically get USD after November 9, 2024.
The payout is mostly for people who fall under the Illiquid Recovery Rights part of Celsius’s bankruptcy plan. But, some of the funds are being set aside for other unexpected issues. So, while it’s a step forward for some, it’s not the full recovery people are hoping for.
Legal Woes for Celsius CEO
While creditors wait for their share, Celsius’s former CEO, Alex Mashinsky, is in deep trouble. He’s facing charges for market manipulation and fraud, including messing with the CEL token. Recently, a judge shot down his attempt to dismiss two fraud charges. If he’s convicted on all seven charges, he could spend up to 115 years behind bars. His trial is set for January 2025, so there’s more drama to come.
Celsius will soon begin a second distribution of $127 million made available from the Litigation Recovery Account to eligible creditors (Classes 2, 5, 7, 8, and 9). Distributions will be made in BTC or USD, based on eligibility. For more details, please refer to this notice:…
— Celsius (@CelsiusNetwork) November 27, 2024
The Aftermath of Crypto Winter
The bankruptcy of Celsius is just another result of the 2022 crypto winter. This caused a lot of investors to lose their wealth. The payout is a small relief for some, but it’s clear the crypto world has not recovered yet.
Big cases like Celsius and BlockFi show just how much the industry has to fix. And even the law firms involved aren’t getting off easy. Kirkland & Ellis, which is handling several crypto cases, has reportedly earned $120 million in fees. So, yeah, you’ve got to wonder who’s really benefiting from all this mess.
What’s Next?
For creditors, this payout is a bit of good news. But it doesn’t come close to making up for the massive losses. With Mashinsky’s trial around the corner, there’s a lot more to unfold. The crypto world has a long way to go before it recovers, and this isn’t the end of the story.
