Celsius, a bankrupt cryptocurrency lender, has revealed that the majority of eligible creditors have now received liquid cryptocurrency distributions facilitated by its two appointed distribution agents: payments giant PayPal and cryptocurrency exchange Coinbase. This update comes as part of a recent court filing submitted by Kirkland & Ellis LLP, the legal representation for Celsius, following the company's decision to exit bankruptcy protection, a move initially initiated in July 2022.
Kirkland & Ellis LLP provided insights into the creditor distributions outlined in Celsius' reorganization plan. The distributions are managed through two distinct channels: U.S. holders receive their cryptocurrency allocations via PayPal, while overseas holders' allocations are handled by Coinbase. The legal team announced the transfer of cryptocurrencies worth $2 billion to creditors, comprising 20,255.66 Bitcoin and 301,338.77 Ethereum. They also noted that nearly 75% of the BTC/ETH allocated by PayPal/Venmo and Coinbase has been successfully collected by holders as of the filing date.
However, the court filing clarified that account holders who have not consented to the reorganization plan will not receive any distributions until the resolution of their individual claims. Celsius had sought court approval for its reorganization plan in October 2023, with the aim of repaying creditors by the end of that year.
In parallel, Alex Mashinsky, the former CEO of Celsius, is scheduled to stand trial in September 2024 regarding the collapse of the cryptocurrency lender. Recent scrutiny has been directed at his legal team over potential conflicts of interest, as they also represent Sam Bankman-Fried, the former CEO of the bankrupt cryptocurrency exchange FTX. U.S. prosecutors have raised concerns about attorneys Marc Mukasey and Torrey Young, both of whom have filed notices to appear in criminal cases against the former cryptocurrency CEOs.
The U.S. government has requested a Curcio hearing, during which the judge is expected to address inquiries regarding potential conflicts of interest and the involvement of the two attorneys in cases concerning Bankman-Fried and Mashinsky.
