Celsius, a bankrupt crypto lender has announced a second payout of $127 million to its creditors. This bankruptcy distribution, which will be made in cash or cryptocurrency, will cover approximately 60% of the creditors’ claims.
Celsius Bankruptcy Payout Details
According to the recent court filing, creditors will receive the distribution based on the value of their claims as of the date of the petition.
A significant part of the payout will be in cryptocurrency, with Bitcoin set to be valued at an average price of $95,836. The distribution will be made in cash for those who cannot receive cryptocurrency through the designated agents.
This decision comes after the company’s first payout, which distributed $2 billion in crypto to over 171,000 creditors.
The payment distribution marks another step in Celsius’s bankruptcy process as the company continues to navigate the challenges of its financial collapse.
Celsius filed for bankruptcy in 2022 after a $1.2 billion gap was uncovered in its balance sheet, leading to a loss of trust and a significant drop in assets.
Since then, the company has been working through its bankruptcy plan, offering partial recovery for creditors who were affected by the financial collapse. The second payout adds to the ongoing efforts to repay creditors and resolve the issues that led to Celsius’s downfall.
CEO Faces Legal Trouble Amid Bankruptcy
Amid the ongoing Celsius Bankruptcy proceedings, the company’s former CEO, Alex Mashinsky, is facing serious legal issues.
Mashinsky has been accused of fraud and misleading customers about the company’s financial health, leading to a class-action lawsuit filed by several regulatory bodies, including the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC).
The charges against Mashinsky include allegations that he misled customers about the safety of their investments and the performance of the company’s crypto lending products.
Mashinsky’s request to dismiss the fraud charges was rejected earlier this year. He faces a potential prison sentence of up to 115 years if convicted.
The fraud charges have added another layer of complexity to the already contentious Celsius Bankruptcy process, as creditors are left to navigate the company’s legal troubles while trying to recover their funds.
Legal experts are closely monitoring the case, as it could set a significant precedent for other crypto lending firms facing similar regulatory challenges.
Since the bankruptcy filing, Celsius has been under intense scrutiny from both regulators and the public.
In addition to the Celsius Bankruptcy, another crypto platform, Haru Invest, has also faced major financial fallout. The South Korean firm, which promised high returns on crypto deposits, was declared bankrupt after a $1 billion fraud was uncovered.
When the platform halted withdrawals in June 2023, over 16,000 investors were affected. Haru Invest’s executives, including CEO Hugo Hyungsoo Lee, were arrested in connection with the fraud, and the company is now set to liquidate its assets in hopes of recovering some funds for its creditors.
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