Celsius is preparing to issue a second distribution of $127 million to eligible creditors from its Litigation Recovery Account.
This amount will be distributed in Bitcoin (BTC), Ethereum (ETH), or US USD, depending on the receiving conditions.
Strong Confidence for Most Celsius Creditors
According to file Latest from the bankruptcy court, the Litigation Administrators have earmarked approximately $127 million, after deducting fees and expenses, for this second tranche.
These funds will be transferred to the Effective Date Debtors to give Celsius creditors the right to recover distressed assets under the company’s bankruptcy plan. A portion of the fund will be kept in reserve as specified in the plan.
Notably, creditors who want to receive distributions in BTC or Ethereum (ETH) need an active Coinbase account. Account details must match the information stored at Celsius.
“Under the Coinbase Agreement, after November 9, 2024, non-corporate creditors that have not yet received distributions from Celsius via Coinbase will automatically switch to another US Dollar (USD) distribution partner,” Celsius stated on X (formerly Twitter).
Meanwhile, legal troubles with former CEO Alex Mashinsky continue. Earlier this month, a federal court denied Mashinsky’s request to drop two fraud charges related to Celsius’ collapse.
These allegations include market manipulation involving the CEL Token. The court allowed the case to proceed under the provisions of the Commodity Exchange Act and the Securities Act.
Mashinsky is facing seven criminal charges related to the company’s collapse in 2022. If convicted, he could be sentenced to up to 115 years in prison.
Earlier this year, US Judge Kaplan summoned Sam Bankman-Fried to court to resolve a potential conflict of interest regarding his legal representation. Prosecutors have expressed concerns about Bankman-Fried’s attorney, who once represented Alex Mashinsky.
Law firm Kirkland & Ellis, which has managed bankruptcy cases for Celsius, BlockFi, and Voyager Digital, is said to have earned more than $120 million in remedial fees.
Overall, Celsius’ bankruptcy story seems to be nearing an end. Crypto Winter 2022 has affected many users, sometimes severely. However, this latest round of refunds may ease their difficulties. The trial of former CEO Mashinsky is expected to take place in January 2025.