Celsius, in its bankruptcy proceedings, has distributed more than $253 billion in cryptocurrency and cash. This distribution has reached around 251,000 creditors, accounting for approximately two-thirds of the total number and 93% of the value. Despite this significant effort, 121,000 creditors still have unclaimed rights. On average, each creditor has a distribution right worth about $1,500, but many are hesitant to claim these small amounts.
Restructuring Plan Approved in November
The United States Bankruptcy Court for the Southern District of New York approved Celsius’ restructuring plan in November, marking the official conclusion of the bankruptcy process. The plan provides for the distribution of cryptocurrency, cash, and shares of MiningCo to approximately 375,000 creditors. Access NEWSLINKER to get the latest technology news.
Given Celsius’ previous non-compliance with regulatory requirements, various regulatory bodies attempted to impose sanctions against the company, which added layers of complexity to the distribution process.
Ongoing Legal Battle with Tether
In addition to the distribution process, Celsius has initiated a lawsuit against Tether to reclaim $33 billion worth of Bitcoin. Tether has described these claims as “extortion” and plans to file a countersuit. These ongoing legal battles further complicate Celsius’ bankruptcy proceedings and could have lasting effects on the cryptocurrency market.
Concrete Lessons for Future Cases
Key Insights for Stakeholders:
- Monitor regulatory compliance to avoid complications in bankruptcy processes.
- Pursue timely legal actions to safeguard creditor interests.
- Understand the importance of small claims in large distribution operations.
The extensive bankruptcy process of Celsius showcases an unprecedented distribution operation within the cryptocurrency sector. The community eagerly awaits the resolution of the incomplete distributions. This case, along with its legal and regulatory pressures, could offer critical insights for managing future cryptocurrency bankruptcies effectively.
Historically, bankruptcy in the cryptocurrency world has always been fraught with challenges, whether due to hacks or mismanagement. While the Mt.Gox incident was a result of hacking, FTX stands as an example of poor management. The compensations made in the Celsius case, however, mark a significant milestone in the history of cryptocurrency.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/celsius-distributes-over-253-billion-in-crypto