365Crypto
The native token of Celsius Network, CEL, has seen a remarkable 300% increase in value just a month after the company repaid $2.5 billion to its creditors. This jump reflects a significant recovery following Celsius’ bankruptcy settlement.
Repayment Boosts CEL Token
Celsius Network, a digital asset lending platform, has been working to resolve its financial issues after filing for bankruptcy. On August 26, a court filing revealed that Celsius had repaid $2.5 billion to around 251,000 creditors. At that time, CEL was trading at $0.16. By September 23, the token’s price had surged to $0.65, representing a 300% increase in just under a month. As of the most recent data, CEL is trading at approximately $0.58.
Despite this impressive rebound, the token remains far below its peak of $8.05, which it reached in June 2021, down by 1,287%.
Celsius’ $2.5 Billion Creditor Distribution
Celsius repaid about 84% of the $3 billion it owed to creditors by the end of August. While a large portion of the creditors has been compensated, some are not rushing to claim their funds. The filing highlighted that many creditors are owed small amounts, with 64,000 creditors being eligible for less than $100 and another 41,000 owed between $100 and $1,000. This may explain why some creditors have not yet taken action to retrieve their assets.
The bankruptcy administrator has attempted over 2.7 million distributions to eligible creditors as part of the repayment process.
Celsius’ Bankruptcy Journey
Celsius filed for Chapter 11 bankruptcy in July 2022 after facing financial difficulties. The company sent an email to its users announcing the bankruptcy, shortly after hiring legal counsel for the process.
The bankruptcy resulted in fines totaling $4.7 billion from the U.S. Federal Trade Commission. Despite the fines, Celsius has expressed satisfaction with the agreements it reached with various U.S. regulatory bodies.
Adding to the company’s woes, former CEO Alex Mashinsky was arrested on charges of financial fraud, misleading customers, and manipulating the token’s price.
