Celsius Has Repaid $2.53 Billion to Its Creditors

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As a seasoned analyst with a decade of experience in the volatile world of cryptocurrency, I must say that Celsius’s recent progress in repaying its creditors is noteworthy but far from a cause for unbridled celebration. The company’s bankruptcy declaration last July was a stark reminder of the risks inherent in this burgeoning industry, and the fact that it has managed to return over 93% of eligible funds to more than a quarter-million creditors is a step in the right direction.

Celsius, a company that owes money to its lenders, has been chipping away at its debt. As of the latest court documents, it’s reported that they have returned approximately 93% or $2.53 billion to more than 251,000 creditors.

In July 2022, Celsius was officially declared bankrupt following a period where it let its customers earn interest on their cryptocurrency holdings.

At its zenith, the firm boasted a staggering $25 billion in holdings and catered to 1.7 million customers. Regrettably, a combination of a slump in the cryptocurrency sector and legal complications led to an extended period – over a year – where numerous clients were unable to retrieve their funds.

Under this scheme, we’re setting up a fresh entity known as Ionic Digital (previously NewCo), which has secured an investment of $450 million. Ionic Digital will primarily delve into Bitcoin mining and staking activities. The ownership structure for this new venture has been transferred to the previous users and creditors of Celsius.

While some creditors have yet to receive their repayments, approximately 121,000 creditors remain unaccounted for. A significant number of these creditors are owed relatively small amounts, with around 64,000 users still waiting for less than $100 and another 41,000 expecting payments between $100 and $1,000.

The court noted that these smaller creditors might be less motivated to complete the steps needed to claim their money.

Additionally, it’s important to note that Celsius is currently grappling with various legal matters. One such issue involves a lawsuit filed by Tether, alleging the mishandling of approximately $2.4 billion in Bitcoin prior to bankruptcy.

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2024-08-28 03:16