Once a prominent player in the cryptocurrency lending space, Celsius Network has commenced its second round of distributions to creditors, amounting to $127 million. This follows the company’s prior efforts to distribute approximately $3 billion in crypto and fiat currency, initiated after a successful vote on its reorganization plan earlier this year.
The latest distribution is aimed at eligible creditors affected by Celsius’ collapse and subsequent Chapter 11 bankruptcy filing, which temporarily halted withdrawals before the reorganization efforts.
Celsius Implements Changes To Second Distribution
According to court documents, the funds for this distribution were converted from cash received from Litigation Administrators into Bitcoin (BTC) for eligible creditors with approved claims. This conversion was done to streamline the distribution process and minimize administrative burdens.
Each eligible creditor will receive a cumulative distribution representing around 60.4% of their claims’ value as of the petition date. The BTC allocated for this distribution is based on a weighted average price of $95,836.23, reflecting the price at which Celsius purchased the cryptocurrency for this purpose.
The distribution process is designed to ensure that creditors receive their allocated amounts in either cash or liquid cryptocurrency. If a creditor was scheduled to receive a distribution via US-based crypto exchange Coinbase but did not receive it by the designated date, the firm will continue to hold the liquid crypto for that creditor and convert it to cash when appropriate.
Bankruptcy Challenges
Notably, the documents reveal that some creditors received initial distributions based on varying recovery rates—57.87% for some and 57.65% for others. To rectify this discrepancy, those who received a higher initial distribution will see a corresponding reduction in their second distribution.
Eligible creditors are encouraged to ensure their distribution information is up-to-date, especially if they need to change their distribution agent. If a creditor experiences issues receiving their funds, they can create a Customer Care Ticket to seek assistance.
In addition to this distribution, Celsius asserts it will navigate the complexities of its bankruptcy proceedings, which include ongoing litigation that may affect certain creditors’ eligibility for distributions.
At the time of writing, the company’s native token, CEL, is trading at $0.23, recording a slight increase of 1% in the 24-hour time frame. Interestingly, CEL is one of the few cryptocurrencies on the market that has not recorded a significant uptrend over the past three weeks.
Year-to-date, the token is still down 2%, but when compared to its current trading level and its record high, it is even more concerning, with a 97% gap to its all-time high of $8 reached in June 2021 before the company’s collapse.
Featured image from DALL-E, chart from TradingView.com
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Ronaldo Marquez
https://www.newsbtc.com/news/second-distribution-by-celsius-network-creditors-to-receive-bitcoin-valued-at-95000-each/
2024-11-29 18:30:44
