- About 60% of the creditors’ petition date claims will be distributed in the second settlement, which will be given in cash or cryptocurrency.
- Following the disclosure of its $1.2 billion balance sheet shortfall, Celsius declared bankruptcy in 2022.
- Alex Mashinsky, its CEO, is charged with fraud and could spend more than a century in prison.
In a second settlement from its bankruptcy proceedings, Celsius, the now-defunct cryptocurrency lender, is allocating $127 million to qualified creditors, per a court statement filed on Wednesday.
A cumulative distribution in cash or liquid cryptocurrency equivalent to roughly 60.4% of the value of the creditor’s claims as of the Petition Date will be given to each qualifying creditor as a result of the second distribution.
According to the document, eligible creditors would be instructed to receive the compensation in cash if they are unable to obtain liquid cryptocurrency through the designated distribution agency.
With a recovery percentage of 57.65% of qualified claims, the Celsius bankruptcy plan administrators made their first cryptocurrency payout of $2 billion to 171,672 creditors in January of this year.
After a $1.2 billion hole was found in its balance sheet, Celsius declared bankruptcy in 2022. In November, the company came out of bankruptcy.
The Securities and Exchange Commission, the Federal Trade Commission, and the Commodity Futures Trading Commission filed lawsuits against Celsius and former CEO Alex Mashinsky last year for allegedly deceiving consumers. Mashinsky faces a maximum prison term of 115 years and was also charged with fraud.
Mashinsky’s attempt to have two fraud charges removed from his indictment was denied by a U.S. court judge earlier this month.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
