Celsius Network has issued its third major distribution to creditors, releasing $220.6 million as part of its ongoing bankruptcy recovery process. The latest payment marks a significant milestone for thousands of users who lost access to funds when the crypto lender collapsed in mid-2022.
Breaking Down the Distribution
Court filings confirm that the funds come from multiple sources tied to the bankruptcy estate. Roughly $17 million was unlocked after claims linked to Celsius’s founder were denied. Another $86.4 million was freed from reserves previously held for disputed cases, while $46.3 million came from forfeited claims.
At the same time, Celsius continues to face steep costs from the lengthy legal process, with more than $63 million spent on professional and administrative fees. Despite this, creditors are beginning to see more substantial returns compared to earlier stages of the recovery.
How Creditors Are Being Paid
Eligible creditors are receiving payouts in Bitcoin and Ethereum, with Coinbase and PayPal handling the verification and distribution process. This ensures compliance with regulatory standards, particularly KYC verification, before funds are released.
Corporate entities, meanwhile, will receive their allocations in U.S. dollars. Beyond direct crypto payouts, Celsius has also introduced equity shares in Ionic Digital, a newly established Bitcoin mining company created as part of the restructuring plan.
According to estimates, the combined crypto distributions and equity allocations could allow creditors to recover between 67% and 85% of their claims, depending on both crypto market conditions and the performance of Ionic Digital.
Earlier Distributions and Road Ahead
The new $220.6 million payout follows earlier creditor disbursements, including a $127 million release in late 2024, which raised total recoveries to more than 60% of eligible claims at that time. With this third round, Celsius has now distributed well over $3 billion in assets, including digital currencies, cash, and equity stakes.
The bankruptcy plan, finalized in early 2024, also paved the way for Ionic Digital to serve as a long-term value generator. Managed by Hut 8 Corp., the mining spinoff is expected to pursue a public listing, giving creditors potential upside beyond immediate repayments.
Outlook for Creditors
For creditors, this latest distribution is a sign that Celsius’s restructuring is finally gaining traction. While payouts are still being delivered in phases, the addition of equity offers a new avenue for recovery, potentially boosting returns if the mining venture performs strongly.
Although the shadow of Celsius’s collapse still looms large, the combination of crypto repayments and mining equity has given creditors more clarity — and more confidence — than at any time since withdrawals were frozen three years ago.
