Celsius Network's Distribution Milestone

Bankrupt crypto lender Celsius Network has reached a significant milestone in its complex repayment process. According to its first Status Report, the company has successfully distributed over $2.5 billion to creditors despite the various challenges faced during the distribution process.

On Monday, Celsius Network's plan administrator presented its first Status Report on distributions to the US Bankruptcy Court for the Southern District of New York.

This court document revealed that by August 2024, Celsius had distributed over $2.5 billion of the eligible value owed to creditors. This substantial payout marks a crucial step in the repayment process.

The Intricacies of Distribution

The last seven months have seen intense efforts to ensure successful distributions to creditors. The plan administrator has been diligently working to address questions and resolve issues experienced by Celsius customers.

According to the report, the distribution plan is " likely the most complicated and ambitious distribution process ever attempted in a Chapter 11 case."

This intricate plan required months of diligence, evaluation, and collaboration between Celsius' bankruptcy administrator and several advisors.

The process involves the distribution of Liquid Cryptocurrency, Cash, and MiningCo Common Stock for creditors outside of the Convenience Class. These repayments are carried out through platforms like Coinbase, PayPal, and Venmo.

Global Reach and Complexity

In total, approximately 375,000 creditors across 165 different countries were eligible for the repayments. This global reach added to the complexity of the distribution process.

The court document highlighted that the difficulty increased as many regulators pursued enforcement actions against Celsius for not being a "fully regulatory compliant business."

Since January 31, Celsius has successfully made distributions to 251,000 creditors. This figure represents around two-thirds of all eligible creditors and approximately 93% of the eligible value.

Despite the challenges, Celsius has progressively made payouts worth around $2.53 billion in cash and cryptocurrencies.

Progress and Remaining Challenges

In the first two weeks of distribution, Celsius creditors received approximately 65% of all the eligible value, worth around $1.7 billion.

A month later, this amount increased to 80% of the then-eligible value, accounting for approximately $2 billion. Since March, the crypto lender has distributed approximately 30% to 40% of the remaining amount, leaving around 121,000 eligible creditors.

Nonetheless, the remaining creditors reportedly have "overwhelmingly small distributions," which might not incentivize them to go through the repayment process.

Of the 121,000 remaining creditors, 64,000 have a distribution of less than $100, while 41,000 creditors have between $100 and $1,000 distributions. Ultimately, "the Plan Administrator has attempted more than 2.7 million distributions in total for the approximately 372,000 currently eligible creditors" and will continue retrying repayments according to the plan.