As a seasoned analyst with years of experience navigating the tumultuous waters of the crypto market, I find myself both intrigued and somewhat disheartened by the recent developments at Celsius. On one hand, it’s encouraging to see that some form of recovery is being made available to creditors, even if it may seem like a drop in the ocean compared to their losses.
Celsius, a cryptocurrency lending company that has filed for bankruptcy, plans to distribute an extra $127 million to its creditors in the near future, as announced on November 28 by the firm’s estate. This distribution comes from the “Litigation Recovery Account,” and it is intended for creditors belonging to classes 2, 5, 7, 8, and 9.
As stated in a Notice filed on November 27th at the United States Bankruptcy Court for the Southern District of New York, these groups comprise retail depositors and users of the “Earn” program, along with creditors holding claims such as withholdings, unsecured loans, or general unsecured debts. However, it excludes those with convenience-based claims or who lack rights to illiquid recovery.
As per the announcement, creditors are set to receive their crypto payments using the same platform they utilized during the initial distribution, which could be PayPal, Venmo, or Coinbase. If they don’t have an account verified on any of these platforms, they will receive a cash payment instead. Corporate creditors too can expect to receive payments, but those with convenience claims will not qualify.
Despite the announcement of another payment coming, some users of crypto platform X voiced dissatisfaction, claiming that the payment was insignificant and arrived too late. A Bitcoin investor named Puffel expressed frustration, exclaiming, “You took 0.7 BTC and numerous other tokens from me! Return them to me!” Another investor, JCH, lamented his loss, stating, “I had 8 BTC… Today I could have been a millionaire… Thieves…” He further added in another post that he received only small amounts, referring to it as “peanuts.
In March, certain creditors of Celsius Corporation asserted that their payments had been decreased by 30% because the debtors’ estate was exclusively using Coinbase for distribution processing.
In simple terms, Celsius filed for bankruptcy in July 2022. The previous CEO of the company, Alex Mashinsky, was taken into custody and indicted on fraud charges in July 2023. These allegations claim he misled depositors about the potential dangers associated with investing in their platform. His court trial is set to commence in January 2025.
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2024-11-28 15:03