Bankrupt cryptocurrency lender Celsius has announced that most eligible creditors have now collected their liquid crypto distributions from its two distribution agents: payments giant PayPal and crypto exchange Coinbase.
In a recent court filing, Kirkland & Ellis — the legal team representing Celsius — provided an update on the creditor distributions outlined in the restructuring plan. This follows Celsius’ recent announcement that it exited bankruptcy, which it initially filed for in July 2022.
According to Kirkland & Ellis, crypto distributions to holders in the United States are facilitated through PayPal, while overseas holders are managed by Coinbase as the distribution agent.
The lawyers declared that $2 billion worth of crypto had been transferred to creditors, including 20,255.66 Bitcoin (BTC) and 301,338.77 Ether (ETH).
“As of the date hereof, a significant number of Holders have successfully collected their Liquid Cryptocurrency from PayPal/Venmo and Coinbase: Nearly 75% of the BTC/ETH set to be distributed by PayPal/Venmo and through Coinbase has already been collected.”
However, the filing explained that account holders who did not agree to the restructuring plan will not receive any distribution until their individual claims are resolved.
Additionally, it mentioned that certain account holders might face challenges in receiving their distribution if Coinbase or PayPal flags any Anti-Money Laundering (AML) or compliance issues.
“Distribution Agents have discretion to refuse making distributions to anyone they believe does not fulfill their compliance and other requirements,” the filing states.
There has been speculation within the crypto industry about how the actions in the restructuring plan might affect the broader crypto market.
On Jan. 5, Cointelegraph reported that Celsius started recalling and rebalancing its crypto assets to ensure timely distributions to creditors.
However, blockchain analytics firm Nansen highlighted at the time that almost a third of the ETH in the pending withdrawal queue currently belongs to Celsius.
Related: Celsius valuation advisor approves value of debtors’ assets and liabilities
In October 2023, Celsius asked the court to approve its restructuring plan, hoping to have creditors repaid before the end of 2023.
Meanwhile, Alex Mashinsky, the former CEO of the now-defunct crypto lender, is scheduled for trial in September 2024 regarding Celsius’ collapse.
However, his legal team has recently faced scrutiny for a potential conflict of interest, as it also represents Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX.
On Feb. 6, U.S. Prosecutors 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.
Cointelegraph recently reported that the U.S. government called for a Curcio hearing, in which the judge may ask questions about a potential conflict of interest and why both lawyers were involved in Bankman-Fried and Mashinsky’s cases.
Magazine: GBTC drops BTC stake by 21%, Celsius exits bankruptcy, and more: Hodler’s Digest, Jan. 28 – Feb. 3
