beincrypto.com
Celsius is preparing a second distribution of $127 million to eligible creditors from its Litigation Recovery Account.
The funds will be distributed in Bitcoin (BTC), Ethereum (ETH), or US dollars, depending on eligibility.
A Sigh of Relief for Most Celsius Creditors
According to the latest Bankruptcy court filing, the Litigation Administrators have allocated approximately $127 million, after deducting fees and expenses, for this second round of payouts.
This amount will go to Post-Effective Date Debtors for Celsius creditors entitled to Illiquid Recovery Rights under the company’s bankruptcy plan. A portion of the funds will be held in reserves as specified in the plan.
Notably, creditors wishing to receive their distribution in BTC or Ethereum (ETH) must have an active Coinbase account. The account details must match those on record with Celsius.
“As per the Coinbase Agreement, after Nov 9, 2024, non-corporate creditors who still have not received their Celsius distribution via Coinbase will automatically be rerouted to a US dollar (USD) distribution partner instead,” Celsius stated on X (formerly Twitter).
Meanwhile, legal troubles for former CEO Alex Mashinsky continue. Earlier this month, a federal court denied Mashinsky’s request to dismiss two fraud charges tied to Celsius’s collapse.
These include allegations of market manipulation involving the CEL token. The court allowed the case to proceed under the Commodity Exchange Act and the Securities Exchange Act.
Mashinsky faces seven criminal charges related to the company’s downfall in 2022. If convicted, he could face up to 115 years in prison.
Earlier this year, US Judge Kaplan summoned Sam Bankman-Fried to court to address a potential conflict of interest involving his legal representation. Prosecutors raised concerns about Bankman-Fried’s attorney, who previously represented Alex Mashinsky.
Law firm Kirkland & Ellis, which managed bankruptcy cases for Celsius, BlockFi, and Voyager Digital, has reportedly earned over $120 million in fees for its work.
Overall, the Celsius bankruptcy saga seems to be nearing an end. The 2022 crypto winter affected many users, some more than others. However, the latest repayment might alleviate their hardships. The former CEO Mashinsky’s trial is set to begin in January 2025.