Celsius announces a $127M payout to creditors, but some users express frustration over delays and small recoveries from the bankrupt crypto lender.
Some are still dissatisfied with the outcome, despite the debtor’s estate for the defunct cryptocurrency lending site announcing a second payment of $127 million to creditors.
An additional $127 million will be disbursed to creditors “soon” by the bankrupt cryptocurrency loan company Celsius, the estate announced in a post on November 28. Class 2, 5, 7, 8, and 9 creditors will receive the payout, which is being made available from the “Litigation Recovery Account,” according to the article.
Retail borrower depositors, users of the “Earn” program, and creditors with withholding, unsecured loans, or general unsecured claims are among these classes, per a Notice of Commencement filed in the United States Bankruptcy Court for the Southern District of New York on November 27. Users not eligible for illiquid recovery rights or have convenience claims are excluded.
The notification states that creditors will be paid in cryptocurrency using the platform they used for the initial distribution: Coinbase, PayPal, or Venmo. They will be paid in cash if they do not have a verified account with these services. The payment will also be available to specific corporate debtors, but those with convenience claims will not be eligible.
Some cryptocurrency users on X expressed dissatisfaction about the payment, claiming it was too small and too late, even though it was ostensibly good news that a second payment would be made. “You guys took 0.7 BTC and several other tokens from me! Bitcoin investor Puffel yelled, “Give it back to me!” “I lost eight bitcoins here. Thieves, I might be a millionaire today. JCH, a Bitcoin investor, said in a second post that he was given “peanuts.”
Because the debtors’ estate only uses Coinbase to handle disbursements, several Celsius business creditors alleged in March that they received 30% lower payments.
Temperature filed for bankruptcy in July 2022. In July 2023, Alex Mashinsky, the company’s former CEO, was arrested and charged with fraud for allegedly deceiving depositors about the risks associated with participating on the platform. January 2025 is when his trial is expected to start.
