According to the Celsius bankruptcy administrator, more than 121,000 creditors have yet to claim their funds.
Celsius has reimbursed two-thirds of its eligible clients as part of its much-anticipated bankruptcy proceedings.
As per an August 26 court filing, the bankrupt cryptocurrency lender has returned about $2.53 billion to 251,000 creditors.
This sum accounts for roughly 84% of the $3 billion in assets owed by Celsius to more than 375,000 creditors.
These repayments are a positive sign for the growing cryptocurrency industry.
They coincide with the bankruptcy proceedings of the Mt. Gox exchange, which owed more than $9.4 billion in cryptocurrency to 127,000 creditors. After a decade, these creditors are finally starting to recover their funds.
Not All Creditors Are Seeking to Claim Their Cryptocurrency
Not all creditors are actively trying to reclaim their cryptocurrency due to the minimal amounts owed to them.
For the remaining 121,000 creditors who have not yet claimed their funds, around 64,000 are owed less than $100 in crypto, while 41,000 are owed between $100 and $1,000, according to the filing:
“Given the small amounts at issue for many of these creditors, they may not be incentivized to take the steps needed to successfully claim a distribution.”
The bankruptcy administrator will attempt to redistribute funds to these creditors through Coinbase every two weeks, while PayPal claim codes will always be available for credit redemption.
The administrator stated it “attempted more than 2.7 million distributions in total for the approximately 372,000 currently eligible creditors.”
Overview of the Celsius Bankruptcy Saga
Celsius filed for bankruptcy in July 2022, a month after suspending user withdrawals.
The company argued that the suspension was necessary to put it in a “better position to honor, over time, its withdrawal obligations” following the sharp decline in the price of its native token, Celsius (CEL), in 2022.
During the bankruptcy process, Celsius agreed to pay $4.7 billion in fines to the United States Federal Trade Commission and reached settlements with the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
Former CEO Alex Mashinsky was arrested and charged by federal prosecutors with multiple counts of financial fraud, including manipulating CEL’s price and misleading Celsius customers.
Mashinsky has pleaded not guilty and is currently out on a $40 million bond while awaiting trial in September.
