Celsius, as part of its bankruptcy process, distributed over $253 billion in cryptocurrency and cash. The distributions reached approximately 251,000 creditors, covering about two-thirds of them numerically and 93% in value. However, 121,000 creditors have yet to claim their rights. On average, creditors have a distribution right worth $1,500, but many are reluctant to claim due to small amounts.
Approval in November
Celsius’ bankruptcy process officially ended with a restructuring plan approved by the United States Bankruptcy Court for the Southern District of New York in November. This plan includes the distribution of cryptocurrency, cash, and shares of MiningCo to approximately 375,000 creditors.
Given that Celsius was a business that did not fully comply with regulatory requirements before bankruptcy and many regulatory bodies attempted to impose sanctions against the company, the distribution process became even more complicated.
Legal Battle with Tether Continues
In addition to the distribution process, Celsius filed a lawsuit against Tether to return $33 billion worth of Bitcoin. Tether described this claim as “extortion” and stated that it plans to file a countersuit. The legal processes further complicate Celsius’ bankruptcy process, and these developments could have long-term effects on the cryptocurrency market.
Celsius‘ bankruptcy process revealed an unprecedented distribution operation in the cryptocurrency world. The outcome of this process and when the incomplete distributions will be completed are eagerly awaited. It is believed that the relevant legal processes and regulatory pressures could provide important lessons on how cryptocurrency companies will manage bankruptcy processes in the future.
As known in cryptocurrency history, bankruptcy processes always emerged as problematic situations. Sometimes these difficult processes occurred due to hacks, while other times they resulted from poor management. The Mt.Gox incident is an example of a bankruptcy caused by a hack, while FTX can be cited as an example of poor management. However, the fact that creditors were at least compensated in the Celsius case is a significant development in cryptocurrency history.
