The majority of qualified creditors have now received their liquid bitcoin allocations from Celsius’s two distribution agents, the cryptocurrency exchange Coinbase and the massive payments company PayPal, according to the bankrupt cryptocurrency lender. The legal team for Celsius, Kirkland & Ellis, recently filed a court document with an update on the creditor distributions specified in the restructuring plan. This comes after Celsius filed for bankruptcy in July 2022 and just announced that company has emerged from that status.
Kirkland & Ellis state that Coinbase serves as the distribution agent for cryptocurrency distributions to holders abroad, while PayPal facilitates distributions to US holders.
As of this date, a significant number of Holders have successfully collected their Liquid Cryptocurrency from PayPal/Venmo and Coinbase: Nearly 75% of the BTC/ETH set to be distributed by PayPal/Venmo and through Coinbase has already been collected. The lawyers announced that $2 billion worth of cryptocurrency, including 20,255.66 Bitcoin, had been transferred to creditors. Nonetheless, the document clarified that account holders who declined the restructuring plan would not be paid until their specific claims were settled.
Furthermore, it stated that in the event that Coinbase or PayPal raises any red flags related to compliance or Anti-Money Laundering (AML), some account holders may encounter difficulties obtaining their distribution.
Distribution Agents are free to decide whether or not to distribute to anyone they feel does not comply with their compliance standards and other guidelines. Within the cryptocurrency community, conjecture has been raised regarding the potential impact of the reorganization plan’s measures on the overall cryptocurrency market to guarantee prompt payments to creditors, Celsius began recalling and adjusting its cryptocurrency holdings on January 5, according to a report But at the moment, blockchain analytics company Nansen made clear that Celsius currently possesses about a third of the ETH in the pending withdrawal queue with the goal of repaying creditors by the end of 2023, Celsius requested the court to adopt its restructuring plan in October of that year. Regarding Celsius’ bankruptcy, a trial for Alex Mashinsky, the former CEO of the now-defunct crypto lender, is set for September 2024 but because his legal firm also represents Sam Bankman-Fried, the former CEO of the defunct cryptocurrency exchange FTX, there has been new scrutiny regarding a possible conflict of interest.Concerns over attorneys Marc Mukasey and Torrey Young, who have both filed notices of appearance in the criminal charges against the former CEOs of cryptocurrency, were voiced by U.S. prosecutors on February 6.
According to a recent article, the U.S. government requested a Curcio hearing, during which the judge is expected to inquire into possible conflicts of interest and the reasons behind the involvement of both attorneys in the cases of Bankman-Fried and Mashinsky.