Bankrupt platform Celsius will return another $127 million in bitcoin and cash to customers

What’s new? Bankrupt crypto lending platform Celsius will pay creditors another $127 million or 2,75% of claims. The payout follows a first round earlier this year in which the firm refunded 251 000 affected customers $2,53 billion or 57,65% of the claims amount.

The court’s decision

What else is known? As a result of the second distribution, each creditor will receive cash or bitcoins, recovering 60,4% of the funds frozen by the platform.

Celsius will continue to work with third-party platforms to distribute assets. For example, lenders wishing to receive bitcoins must have a verified account on the US crypto exchange Coinbase linked to a Celsius account.

In the case of lenders who are unable to accept the cryptocurrency, the managers will sell the bitcoins on the open market and distribute the proceeds in US dollars via wire transfers to the accounts of payment platforms PayPal and Venmo.

Former Celsius CEO Alex Mashinsky will go on trial on January 28, 2025, with a preliminary hearing scheduled for January 16. A US federal court recently denied his motion to dismiss fraud charges in connection with the company’s collapse.

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The Celsius platform was launched in 2017 and gained popularity during the coronavirus pandemic amid a crypto market rally, attracting customers with easy access to credit and high interest rates on deposits.

Celsius lent customer deposits to institutional investors at interest, but faced a massive outflow of deposits as a result of the market crash in 2022. Restructuring attempts failed, and bankruptcy proceedings were initiated in July.

Following this, Celsius was twice accused in court of organizing a Ponzi scheme. As the media wrote, the management lost millions of dollars of clients on high-risk schemes.

The US authorities brought charges against Mashinsky for fraud and market manipulation in July last year, and the platform itself was fined $4,7 billion.

Later, the platform’s former senior executive Roni Cohen-Pavon admitted manipulating the rate of the native token CEL.