Some creditors of the bankrupt cryptocurrency lending firm Celsius are facing significant reductions in their expected compensations. Despite originally being promised payments in crypto, a subset of these creditors is now being coerced into accepting U.S. dollar settlements, which equate to approximately 30% less than what was initially agreed upon. This issue arises from a limitation that allows only 100 Celsius corporate accounts to receive distributions via the Coinbase exchange, forcing some creditors to receive cash payments instead of cryptocurrency.<\/p>\n\n\n\n
The controversy has sparked among small business creditors who find their payments substantially reduced compared to the top 100 business accounts on Celsius. With the price of cryptocurrencies like Bitcoin and Ether having increased significantly since the distribution agreement, these creditors are facing notable financial losses.<\/p>\n\n\n\n
One Australian creditor, owed 0.182 BTC and 3.05 ETH according to the bankruptcy terms, was informed they would receive $15,741 in cash, which is 36% less than the current market value of $24,552 for the owed cryptocurrencies. This contrasts starkly with top-100 corporate creditors who reportedly receive the full crypto amount as promised.<\/p>\n\n\n\n
The issue has led to letters being sent to the United States bankruptcy Judge Martin Glenn, overseeing the case, by disgruntled creditors. They express concerns over the fairness and transparency of the distribution process, highlighting a perceived inequity in how distributions are being handled.<\/p>\n\n\n\n
The Celsius bankruptcy plan, confirmed on November 9, uses two distinct sets of crypto prices for calculating creditor payments: the “petition date” price (when Celsius filed for bankruptcy) and the “effective date” price (for distributions). This complex formula has resulted in varied payout scenarios, with most creditors receiving payments in crypto rather than U.S. dollars. However, due to regulatory and operational constraints, some are left with no option but to accept cash settlements, often at a considerable loss.<\/p>\n\n\n\n
The ongoing crypto bull market has exacerbated the situation for those receiving reduced payments, as the potential gains during the bankruptcy proceedings have been significant. This discrepancy has sparked debates over fairness and the equitable treatment of creditors, with some alleging that the settlement plan offers “special treatment” to certain accounts.<\/p>\n\n\n\n
As the Celsius bankruptcy saga continues, the creditor community remains divided, with some benefiting from the agreed-upon settlement terms while others feel shortchanged by the process. The situation underscores the complexities and challenges of managing bankruptcy in the rapidly evolving and highly volatile cryptocurrency market.<\/p>\n","protected":false},"excerpt":{"rendered":"
Some creditors of the bankrupt cryptocurrency lending firm Celsius are facing significant reductions in their expected compensations. Despite originally being promised payments in crypto, a subset of these creditors is now being coerced into accepting U.S. dollar settlements, which equate to approximately 30% less than what was initially agreed upon. This issue arises from a […]<\/p>\n","protected":false},"author":10,"featured_media":4188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[258,40],"tags":[],"class_list":{"0":"post-4186","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ethereum","8":"category-regulation"},"acf":[],"yoast_head":"\n