172K Creditors Receive $2B Worth of Crypto from Celsius

Celsius, the bankrupt cryptocurrency lender, has announced that most eligible creditors have received their liquid crypto distributions. The distributions were facilitated by two distribution agents, PayPal and Coinbase. Kirkland & Ellis, the legal team representing Celsius, provided an update on the creditor distributions outlined in the restructuring plan in a recent court filing. The distributions were made to holders in the United States through PayPal and to overseas holders through Coinbase. A total of $2 billion worth of crypto, including 20,255.66 Bitcoin and 301,338.77 Ether, was transferred to creditors. However, account holders who did not agree to the restructuring plan will not receive any distribution until their individual claims are resolved. Furthermore, some account holders may face challenges in receiving their distribution if Coinbase or PayPal identifies any Anti-Money Laundering or compliance issues. Speculation has arisen in the crypto industry regarding how the actions outlined in the restructuring plan might impact the broader crypto market. Cointelegraph reported that Celsius began recalling and rebalancing its crypto assets in order to ensure timely distributions to creditors. However, Nansen, a blockchain analytics firm, noted that almost a third of the ETH in the pending withdrawal queue belongs to Celsius. In October 2023, Celsius sought court approval for its restructuring plan with the aim of repaying creditors before the end of 2023. The former CEO of Celsius, Alex Mashinsky, is scheduled for trial in September 2024 in relation to Celsius’ collapse. However, his legal team has faced scrutiny for a potential conflict of interest, as it also represents Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX. U.S. Prosecutors have raised concerns about lawyers Marc Mukasey and Torrey Young, who have both filed notice of appearances in the criminal cases against the former crypto CEOs. The U.S. government has called for a Curcio hearing to address the potential conflict of interest and the involvement of both lawyers in Bankman-Fried and Mashinsky’s cases.