Supplemental Corporate Creditor Distribution to Eligible Corporate Creditors

TABLE OF CONTENTS

• What is the corporate supplemental distribution?
• Which corporate creditors are eligible to receive this supplemental distribution?
• What can I expect to receive from this supplemental distribution?
• I didn’t receive any email about this supplemental distribution but I think I should have gotten something. How do I check to see if I am eligible?
• What happens if I don’t fill out the form?
• What is the process I can expect after electing to receive the supplemental distribution in Liquid Cryptocurrency?
• Can I receive crypto to a wallet outside of Coinbase?
• What kind of Coinbase accounts are supported?
• Coinbase institutional accounts are the only type of Coinbase account supported for this distribution. 
• What kind of crypto will I receive if I elect to receive Liquid Cryptocurrency?
• I already received a distribution in Cash, what can I expect to receive?
• What is the process I can expect after electing to receive the supplemental distribution in Cash?
• I want to receive my supplemental distribution in Cash, but I can’t receive a wire or check. What are my options?
• I recently moved and want to make sure I receive my Cash distribution via check to the new address. What should I do?
• I don’t have a bank account set up for my corporate entity, how can I receive Cash?

What is the corporate supplemental distribution?

After the court postponed the hearing on the Corporate Creditor Motion, the Post-Effective Debtors (“Celsius”), Coinbase, and the Ad Hoc Committee of Corporate Creditors reached an agreement to provide a supplemental distribution to Eligible Corporate Creditors that would provide such creditors with either the Liquid Cryptocurrency they would have been entitled to under the Plan if they had originally been scheduled for a Liquid Cryptocurrency distribution or the Cash equivalent thereof.

All Eligible Corporate Creditors, except those creditors in the Convenience Class, can elect to receive their supplemental distribution in Cash or Cryptocurrency. Eligible Corporate Creditors in the Convenience Class cannot elect to receive Liquid Cryptocurrency. If you are in the Convenience Class and still elect to receive Liquid Cryptocurrency in Item 1, you will receive Cash by default.

If an Eligible Corporate Creditor elects to receive a Liquid Cryptocurrency distribution, it must complete the onboarding process with Coinbase in a timely manner. If an Eligible Corporate Creditor elects to receive a Cash distribution, or fails to submit the Election Form by November 4, 2024, at 10:00pm UTC, then Celsius will sell at market prices the Liquid Cryptocurrency allocated to such creditor as close as reasonably practicable to the expected distribution date, and such creditor will receive the proceeds of such sale. The order associated with this motion, which contains more detail, can be found here: https://cases.stretto.com/public/x191/11749/PLEADINGS/1174910032480000000043.pdf 

Celsius will work to meet specific deadlines for Cash distributions, including selling the corresponding cryptocurrency within 7-14 days of the relevant distribution and making an initial distribution attempt within 14 days of receiving the necessary information from the applicable creditor. Coinbase will use commercially reasonable efforts to deliver an invitation to start the onboarding process to Eligible Corporate Creditors who elect to receive Liquid Cryptocurrency within 14 days of Celsius providing Coinbase with the list of Eligible Corporate Creditors who elected to receive Liquid Cryptocurrency. 

Eligible Corporate Creditors who elect to receive their distribution in Cash can choose their preferred form of distribution: Cash via check, wire transfer, or PayPal’s Hyperwallet service. Of these three options, Celsius believes that for most creditors Hyperwallet will be quicker and more effective in making Cash distributions under the Plan.

Celsius believes that Cash distributions will be quicker to execute than cryptocurrency distributions, as Coinbase will manage the onboarding of a limited number of corporate creditors at a time. This means it could take several months for corporate creditors who choose cryptocurrency to receive their distribution.

Which corporate creditors are eligible to receive this supplemental distribution?

An "Eligible Corporate Creditor" is:

1. A non-individual entity: This includes organizations like trusts, LLCs, partnerships, or corporations (not a person).

2. Located in a Supported Jurisdiction: This means the entity must be in a country where Coinbase can make distributions (as defined in the Supplemental Coinbase Agreement attached as Exhibit 2 here: https://cases.stretto.com/public/x191/11749/PLEADINGS/1174908302480000000015.pdf).

3. Not among the top 100 corporate creditors already selected to receive a distribution through Coinbase: It must not be one of the first 100 corporate creditors who have already been selected to receive a distribution through Coinbase.

If an Eligible Corporate Creditor is not in a Supported Jurisdiction, it cannot participate in the Settlement because Coinbase cannot distribute to them. Therefore, these creditors are not included in this Motion.

Creditors who have outstanding Withdrawal Preference Exposure, opted out of the Class Claim Settlement, or otherwise are currently ineligible to receive a distribution under the Plan will not receive the Election Form until their Claim is eligible for a distribution, and may receive a Cash distribution if Coinbase is no longer available as a Distribution Agent when their Claim becomes eligible for distribution.

What can I expect to receive from this supplemental distribution?

Eligible Corporate Creditors will receive the equivalent of what they would have received had they originally been allocated Liquid Cryptocurrency under the Plan. For example, if an Eligible Corporate Creditor had a $100,000 Earn Claim, they will receive 0.71 BTC and 10.61 ETH, the amount of Liquid Cryptocurrency they would have received had they originally been allocated Liquid Cryptocurrency.

Eligible Corporate Creditors not in the Convenience Class can choose to receive this supplemental payment in either Liquid Cryptocurrency or Cash. Creditors in the Convenience Class will only receive Cash. 

If an Eligible Corporate Creditor chooses to receive a Liquid Cryptocurrency distribution, they will need to complete Coinbase’s onboarding process. Please note that by choosing to receive a Liquid Cryptocurrency distribution, Eligible Corporate Creditors agree not to hold Coinbase, the Plan Administrator, or Celsius responsible for changes in market prices or any issues with the onboarding or distribution process. This agreement is part of the Election Form.

If an Eligible Corporate Creditor chooses to receive a Cash distribution, Celsius will sell at then-market prices the Liquid Cryptocurrency allocated to such creditor as close as reasonably practical to the expected distribution date and distribute the proceeds of such sale to such creditor.

If an Eligible Corporate Creditor has already received a distribution, such creditor’s supplemental distribution will be reduced to account for the distribution they have already received. The example below shows how an Eligible Corporate Creditor’s supplemental distribution will be calculated if such creditor has received a distribution under the Plan.

I didn’t receive any email about this supplemental distribution but I think I should have gotten something. How do I check to see if I am eligible?

Please open a support inquiry with the Distribution Support Team: Go to https://celsiusdistribution.stretto.com/support/tickets/new and select “I need help with my Supplemental Corporate Creditor Distribution.”

What happens if I don’t fill out the form?

If you are an Eligible Corporate Creditor and do not complete the election form by November 4, 2024 at 10:00pm UTC, your supplemental corporate creditor distribution will be made in cash. 

What is the process I can expect after electing to receive the supplemental distribution in Liquid Cryptocurrency?

1. Provide Valid Email Addresses: Celsius will share with Coinbase the email addresses of all creditors who chose to receive their supplemental distribution in Liquid Cryptocurrency. Coinbase will then send onboarding invitations to these creditors within 14 days of receiving such email addresses from Celsius.

2. Start Coinbase’s Onboarding Process: Once Eligible Corporate Creditors receive their invitation, they must begin the onboarding process within 14 days. Creditors then have 30 days to submit all required onboarding documents to Coinbase. If Coinbase asks for additional information, Eligible Corporate Creditors must provide such information within 14 days. If deadlines aren’t met, creditors will be removed from the onboarding process and switched to the process for Eligible Corporate Creditors receiving their supplemental distribution in Cash.

3. Complete Coinbase’s Onboarding Process: This is necessary unless you already have an existing Coinbase institutional account.

4. Switch to Cash Distribution: If an Eligible Corporate Creditor who chooses to receive their supplemental distribution in Liquid Cryptocurrency is rejected by Coinbase or fails to complete the onboarding process on time, they will be switched to the Cash option. These creditors need to provide payment instructions for the Cash distribution. Celsius will then try to start the Cash distribution process within 14 days of receiving these instructions.

Please note, when filling out the Election Form, creditors should state if they have an existing Coinbase institutional account and agree to any necessary account verification or updates to make their account eligible for the distribution. Whether an Eligible Corporate Creditor has an existing account doesn’t guarantee that such account will be eligible to receive a distribution or that the process timing will be shorter, as Coinbase may require updated verification.

Please also note that by choosing to receive a Liquid Cryptocurrency distribution, Eligible Corporate Creditors agree not to hold Coinbase, the Plan Administrator, or Celsius responsible for changes in market prices or any issues with the onboarding or distribution process. This agreement is part of the Election Form.

Can I receive crypto to a wallet outside of Coinbase?

No, Liquid Cryptocurrency Claim distributions are made by Coinbase only.

What kind of Coinbase accounts are supported?

Coinbase institutional accounts are the only type of Coinbase account supported for this distribution. 

Coinbase will send an onboarding invitation to the email address provided by the Eligible Corporate Creditor within 14 days of receiving the list of Eligible Corporate Creditors who elected a Liquid Cryptocurrency distribution from Celsius. The creditor will then have 30 days to submit all required documentation to Coinbase. If additional documentation is requested of the creditor, it must be provided to Coinbase within 14 days. If deadlines aren’t met, creditors will be removed from the onboarding process and switched to the process for Eligible Corporate Creditors receiving their supplemental distribution in Cash.

What kind of crypto will I receive if I elect to receive Liquid Cryptocurrency?

If you elect to receive Liquid Cryptocurrency, you will receive BTC and ETH.

I already received a distribution in Cash, what can I expect to receive?

The amount of Cash already received by an Eligible Corporate Creditor on account of its Claims will be set off against the Liquid Cryptocurrency earmarked for such creditor’s supplemental distribution utilizing the average prices for BTC and ETH (the “BTC and ETH Average Prices”) for the Cash distribution period of February 22, 2024 (the first day any Corporate Creditor received a Cash distribution) to August 12, 2024 ($64,597 for BTC and $3,341 for ETH), and they will receive their supplemental distribution net of that set off. 

For example, if an Eligible Corporate Creditor was supposed to get 1 BTC and 10 ETH under the Plan, they received about $68,748 in Cash, based on January 16, 2024 prices ($42,972.99 per BTC and $2,577.48 per ETH). Such Eligible Corporate Creditor now has two choices:

1. Choose the Supplemental Distribution in Liquid Cryptocurrency:
   • The Cash an Eligible Corporate Creditor already received will be converted to Liquid Cryptocurrency using the BTC and ETH Average Prices. For example, $68,748 in Cash would be equivalent to 0.66524753 BTC and 7.714682 ETH.
   • The creditor will then get the difference between what they were supposed to receive (1 BTC and 10 ETH) and what they’ve already received in Cash.
   • In this case, they would get an additional 0.33475247 BTC and 2.285318 ETH.
   • In this example, if the market price is $60,000 for BTC and $3,000 for ETH, the creditor would get a supplemental distribution in Liquid Cryptocurrency worth $26,941.10. 
   • This assumes they successfully complete Coinbase’s onboarding process. If they can’t receive a Liquid Cryptocurrency distribution for any reason, Celsius will sell the Liquid Cryptocurrency they were supposed to get (minus what they’ve already received) and give them the Cash equivalent.
2. Choose the Supplemental Distribution in Cash:
   • If an Eligible Corporate Creditor chooses to receive Cash, or if it doesn’t respond to the Election Form by November 4, 2024, Celsius will sell the Liquid Cryptocurrency allocated to such creditor, less the amount such creditor has already received, at market prices as close to the Cash distribution date as reasonably practicable.
   • For example, if the market price is $60,000 for BTC and $3,000 for ETH, the creditor would get a supplemental distribution of about $26,941.10 in Cash. This amount comes from selling the 0.33475247 BTC and 2.285318 ETH, which is the amount they would have received if they had elected to receive Liquid Cryptocurrency after subtracting the Cash they’ve already received.

What is the process I can expect after electing to receive the supplemental distribution in Cash?

Eligible Corporate Creditors who choose to receive Cash can pick from three options: (a) Hyperwallet, (b) check, or (c) wire transfer. Celsius will try to accommodate these choices, but can't guarantee that each option will be available. For example, an Eligible Corporate Creditor might not be able to use Hyperwallet or might have trouble cashing a USD check in their jurisdiction.

To receive the Cash distribution, creditors will need to provide additional information depending on their chosen method. For instance, they might need to provide a mailing address for a check, KYC information for Hyperwallet, or wire transfer instructions. Please follow the instructions in the Election Form.

Please note that wire transfers could be delayed if the provided information is incorrect, if there are issues with banks involved, or if other issues arise.

Celsius will aim to start the Cash distributions within 14 days after the Election Period ends and after receiving the required information from the creditor, whichever is later. However, timing is dependent on accurate payment details, delays from banks, and other factors.

For creditors who don't choose to, or can't receive, the supplemental distribution in Liquid Cryptocurrency, Celsius will sell the corresponding Liquid Cryptocurrency at market prices and send the proceeds of such sale to those creditors.

Specifically, Celsius will try to sell the Liquid Cryptocurrency within 7 to 14 days before making the applicable Cash distribution. After a distribution is successfully completed, Celsius will send a notice to the creditor with details about the amount of Liquid Cryptocurrency sold and the sale price. If a distribution attempt is unsuccessful, Celsius will notify the creditor of the failure reason and next steps.

I want to receive my supplemental distribution in Cash, but I can’t receive a wire or check. What are my options?

If in an eligible jurisdiction, a Cash distribution can be made via Hyperwallet, which facilitates the transfer of USD to a corresponding PayPal account for the creditor.

I recently moved and want to make sure I receive my Cash distribution via check to the new address. What should I do?

Please select “I elect to receive my Supplemental Cash Distribution by receiving a check in the mail.” in Item 2 of the Election Form, and provide the updated mailing address where indicated in the form. Note that if the address that you provide is different from the address on file, you may need to provide proof of address documentation.

I don’t have a bank account set up for my corporate entity, how can I receive Cash?

Creditor distributions, including this corporate creditor supplemental distribution, can only be transferred to the named creditor. If you wish to receive a cash distribution, a wire transfer or check must be made to the named creditor, or a transfer can be initiated via Hyperwallet, a service of PayPal.

How will the rates for conversion from Liquid Cryptocurrency to Cash be determined?

Celsius will sell the Liquid Cryptocurrency allocated for an Eligible Creditor’s distribution, less any amounts already received by such creditor, as close as reasonably practicable to the expected distribution date. Eligible Corporate Creditors who elect to receive a Cash distribution will receive the proceeds of such sales. This means BTC and ETH will be sold close to the time of the Cash distribution to reflect current market prices, instead of using a fixed date for all distributions.