Celsius Creditors Receive Liquid Crypto Payouts, Former CEO Faces Trial over Firm's Collapse
Summary:
Bankrupt cryptocurrency lender, Celsius, confirms that most eligible creditors have received their liquid cryptocurrency distributions from PayPal and Coinbase. This follows Celsius' successful emergence from bankruptcy. Crypto distributions are processed through PayPal for US claimants and Coinbase for overseas claimants, with $2B worth of crypto claimed so far. However, account holders who opted out of the class claim settlement have yet to receive their liquid crypto. Celsius is facing scrutiny, with its former CEO, Alex Mashinsky, due to stand trial in 2024 over the firm's collapse, amidst concerns about potential conflict of interest with his legal team.
Insolvent cryptocurrency lending platform Celsius has confirmed that the majority of qualified creditors have received their due cryptocurrency disbursements from its two distribution agents - prominent payment platform PayPal and cryptocurrency exchange Coinbase. An update on this payout progress was given by the legal representatives of Celsius, Kirkland & Ellis, as documented in a recent court submission, following the statement from Celsius last week about its successful emergence from bankruptcy filed in July 2022.
Based on the information provided by Kirkland & Ellis, cryptocurrency disbursements to American claimants are being managed through the payment agent PayPal, while international claimants receive their payments via Coinbase. The legal representatives announced that cryptocurrency totaling $2 billion has been claimed, which includes 20,255.66 Bitcoin (BTC) and 301,338.77 Ethereum (ETH).
They specified, "As of today, most of the claimants have already gathered their liquid cryptocurrency from PayPal/Venmo and Coinbase, with nearly 75% of the BTC/ETH allocated for distribution through PayPal/Venmo and Coinbase already collected."
Nevertheless, those who have chosen to exclude themselves from the group settlement claim have not yet received their liquid cryptocurrency distribution and will remain without until such claim is settled. It was also noted that certain account holders may face obstacles in obtaining their payments if any concerns surrounding anti-money laundering (AML) or compliance are flagged by Coinbase or PayPal.
There is ongoing discussion within the cryptocurrency sector regarding how these actions, as specified in the restructuring plan, could potentially impact the wider crypto market. Earlier this year in January, it was reported that Celsius had initiated the process of recalling and rebalancing its crypto assets to guarantee prompt payments to creditors. Yet, blockchain analytics firm Nansen stated at that time that nearly one-third of ETH in the withdrawal queue was still owned by Celsius.
In October 2023, Celsius sought court approval for its restructuring plan, which aimed to have all creditors reimbursed before year-end 2023. Concurrently, Alex Mashinsky, the ex-CEO of the now-liquidated crypto lending platform, is set for a trial in September 2024 in relation to the organization's downfall. However, his legal counsel has come under recent criticism for a likely conflict of interest as they also represent Sam Bankman-Fried, the ex-CEO of the bankrupt crypto exchange FTX.
On February 6, U.S. Prosecutors aired their concerns regarding lawyers Marc Mukasey and Torrey Young, both of whom have given their notice of appearance in the criminal lawsuits involving the former cryptocurrency company CEOs. The U.S. Government requested a Curcio hearing where judges can explore potential conflicts of interest and why both attorneys are representing Bankman-Fried and Mashinsky.
Published At
2/17/2024 5:55:34 AM
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