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Celsius completes crypto distributions following bankruptcy exit

TL;DR

  • Celsius completed crypto distributions to most creditors after bankruptcy, with PayPal and Coinbase managing transfers.
  • Most eligible creditors received payments, but some faced challenges due to compliance issues.
  • Legal scrutiny arises over potential conflicts of interest involving the former Celsius CEO’s legal team representing another crypto CEO.

Celsius, the cryptocurrency lending platform, has successfully concluded its distribution of liquid crypto assets to most eligible creditors following its exit from bankruptcy. The process, overseen by distribution agents PayPal and Coinbase, has seen approximately £2 billion worth of cryptocurrency transferred to creditors, including notable amounts of Bitcoin and Ethereum.

Smooth distribution process: Majority of eligible creditors receive payments

According to recent court filings by Kirkland & Ellis, the legal representation for Celsius, nearly 75% of the Bitcoin and Ethereum earmarked for distribution through PayPal/Venmo and Coinbase, has already been collected by eligible creditors. The distribution process has been facilitated seamlessly, with PayPal managing distributions for holders in the United Kingdom and Coinbase overseeing overseas holders.

While most eligible creditors have received distributions, certain account holders may face hurdles if flagged for Anti-Money Laundering (AML) or compliance issues by PayPal or Coinbase. The distribution agents retain the discretion to withhold payments from non-compliant individuals until such issues are resolved.

Implications for the crypto market

Speculation within the crypto industry has arisen regarding the broader market implications of Celsius’ restructuring plan. The platform’s recall and rebalancing of crypto assets aimed to ensure timely distributions to creditors, with nearly a third of Ethereum in the withdrawal queue reportedly belonging to Celsius, as highlighted by blockchain analytics firm Nansen.

Former Celsius CEO Alex Mashinsky awaits trial in September 2024 concerning Celsius’ collapse. However, recent scrutiny has emerged over a potential conflict of interest involving Mashinsky’s legal team, which also represents Sam Bankman-Fried, former CEO of bankrupt crypto exchange FTX. U.S. prosecutors have raised concerns about the involvement of lawyers Marc Mukasey and Torrey Young in both cases, prompting calls for a Curcio hearing to address the matter.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Benson Mawira

Benson is a blockchain reporter who has delved into industry news, on-chain analysis, non-fungible tokens (NFTs), Artificial Intelligence (AI), etc.His area of expertise is the cryptocurrency markets, fundamental and technical analysis.With his insightful coverage of everything in Financial Technologies, Benson has garnered a global readership.

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