Celsius Network, once a prominent player in the cryptocurrency lending space, has begun its second round of distributions to creditors, worth $127 million. This follows the company's previous efforts to distribute approximately $3 billion in cryptocurrency and fiat currency, initiated after a successful vote on its reorganization plan earlier this year.
The latest distribution is aimed at eligible creditors affected by Celsius's collapse and subsequent Chapter 11 bankruptcy filing, which temporarily halted withdrawals ahead of reorganization efforts.
Celsius implements changes in the second distribution
According to the court documentsFunds for this distribution were converted from cash received from litigation administrators to bitcoin (btc) for eligible creditors with approved claims. This conversion was made to streamline the distribution process and minimize administrative burdens.
Each eligible creditor will receive a cumulative distribution representing about 60.4% of the value of their claims as of the petition date. The btc allocated for this distribution is based on a weighted average price of $95,836.23, reflecting the price at which Celsius purchased the cryptocurrency for this purpose.
The distribution process is designed to ensure that creditors receive their allocated amounts in cash or liquid cryptocurrency. If a creditor was scheduled to receive a distribution through US-based crypto exchange Coinbase but did not receive it on the designated date, the company will continue to hold liquid cryptocurrency for that creditor and convert it to cash when appropriate.
Challenges of bankruptcy
In particular, the documents reveal that some creditors received initial distributions based on different recovery rates: 57.87% for some and 57.65% for others. To rectify this discrepancy, those who received a higher initial distribution will see a corresponding reduction in their second distribution.
Eligible creditors are encouraged to ensure their distribution information is up to date, especially if they need to change distribution agents. If a creditor is having trouble receiving your funds, you can create a customer support ticket to seek help.
In addition to this distribution, Celsius says it will navigate the complexities of its bankruptcy proceedings, which include ongoing litigation that may affect certain creditors' eligibility for distributions.
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At the time of writing, the company's native token, CEL, is trading at $0.23, registering a slight increase of 1% in the 24-hour period. Interestingly, CEL is one of the few cryptocurrencies in the market that has not registered a significant uptrend in the last three weeks.
So far this year, the token is still down 2%, but compared to its current trading level and all-time high, it is even more worrying, with a 97% gap from its all-time high of $8. reached in June 2021. before the collapse of the company.
Featured image of DALL-E, chart from TradingView.com
