Bankrupt crypto lender Celsius has completed a significant milestone, distributing $2 billion worth of crypto to over 172,000 eligible creditors. This marks a major step in the company’s restructuring plan and signals its official exit from bankruptcy, which was filed in July 2022.
Key Points:
- 20,255.66 Bitcoin and 301,338.77 Ethereum distributed.
- Payments facilitated through PayPal (US) and Coinbase (overseas).
- 75% of BTC/ETH already collected through both platforms.
- Holders who rejected the plan won’t receive distributions until claims are resolved.
- Potential AML/compliance issues could hinder some distributions.
- Speculation continues about broader market impact.
Details and Implications:
The distribution process utilized two major platforms: PayPal for US users and Coinbase for international users. According to the court filing, nearly 75% of the allocated Bitcoin and Ethereum have already been claimed, indicating a smooth initial phase.
However, some challenges remain. Creditors who opposed the restructuring plan won’t receive distributions until individual claims are settled. Additionally, potential anti-money laundering (AML) and compliance concerns could prevent certain users from receiving their share.
The broader market impact of Celsius’ actions remains a topic of discussion within the crypto industry. While the company’s exit from bankruptcy might offer some stability, the legal and financial complexities surrounding its former CEO, Alex Mashinsky, continue to cast a shadow.
Mashinsky’s Trial and Legal Scrutiny:
Mashinsky is scheduled for trial in September 2024 regarding Celsius’ collapse. However, his legal team faces scrutiny due to a potential conflict of interest, as they also represent Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX. This situation could complicate the legal proceedings and further delay resolution for Celsius and its creditors.
Overall, Celsius’ crypto distribution marks a significant step forward, but challenges and uncertainties remain. The ongoing legal battles surrounding Mashinsky and the potential impact on the broader market continue to be key areas to watch.
