Once a heavyweight in the cryptocurrency lending arena, Celsius Network has embarked on its second phase of distributions to creditors, disbursing a substantial $127 million. This follows the company’s earlier initiative to release roughly $3 billion in both cryptocurrency and fiat currency. These actions were set in motion after a successful vote on the company’s reorganization strategy earlier this year.
The Collapse and Reorganization of Celsius Network
The latest round of distributions is strategically targeted at creditors who bore the brunt of Celsius’ downfall and its subsequent Chapter 11 bankruptcy filing. The filing initially put a halt to withdrawals, pending the reorganization process.
Celsius Implements Changes To Second Distribution
Court documents reveal that the funds designated for this distribution were converted from cash obtained through Litigation Administrators into Bitcoin (BTC) for eligible creditors with validated claims. This conversion aims to streamline the distribution process while minimizing administrative burdens.
Each eligible creditor stands to receive a cumulative distribution that represents approximately 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, mirroring the price at which Celsius secured the cryptocurrency for this purpose.
The distribution framework is crafted to ensure creditors receive their due amounts in either cash or liquid cryptocurrency. For those creditors slated to receive distributions via US-based crypto exchange Coinbase but who have not yet received their allocations by the specified date, the firm will retain the liquid crypto and convert it to cash when deemed appropriate.
Addressing Bankruptcy Challenges
Interestingly, the documents disclose that some creditors received initial distributions based on varying recovery percentages—57.87% for some and 57.65% for others. To address this inconsistency, those who received a higher initial distribution will experience a corresponding reduction in their second distribution.
Eligible creditors are urged to ensure their distribution details are current, especially if they need to alter their distribution agent. Should a creditor face challenges receiving their funds, they are advised to create a Customer Care Ticket to solicit assistance.
Beyond this distribution, Celsius is committed to navigating the intricacies of its bankruptcy proceedings, which encompass ongoing litigation that could impact certain creditors’ eligibility for distributions.
The Current State of Celsius’ Native Token: CEL
At the time of writing, Celsius’ native token, CEL, is trading at $0.23, showing a modest 1% increase within a 24-hour period. Interestingly, CEL remains one of the few cryptocurrencies in the market not to have experienced a significant upward trend over the past three weeks.
Year-to-date, the CEL token is down by 2%. However, when juxtaposed with its current trading level and its historical peak, the situation appears more concerning, as it reflects a staggering 97% decline from its all-time high of $8, recorded in June 2021, prior to the company’s collapse.
