Second Distribution

The Litigation Oversight Committee and the Litigation Administrator have made available approximately $127 million from the Litigation Recovery Account for distributions to eligible creditors. Most of this amount will be distributed to creditors as a part of a second distribution, though a certain portion will be held by the Plan Administrator in reserve for those creditors whose claims are not yet eligible for a distribution under the Plan.

A recent notice with more information about this second distribution can be found here: https://cases.stretto.com/public/x191/11749/PLEADINGS/1174911272480000000219.pdf

TABLE OF CONTENTS

• Who is eligible to receive the second distribution?
• Who is not eligible to receive the second distribution?
• If I am eligible to receive the second distribution, why is my distribution held back?
• Who is eligible to receive cryptocurrency for the second distribution?
• What cryptocurrency is being distributed?
• Which creditors will receive USD?
• How will I be notified about the details of my second distribution?
• I still haven’t gotten my first distribution. Will I get the second distribution?
• If my information has changed, does this impact my Distribution Partner? 
• I was assigned to receive cryptocurrency at Coinbase but still haven’t gotten my first distribution and can no longer be serviced at Coinbase. What happens to my first and second distributions?
• What are the recovery rate details of this second distribution?
• Will Corporate Creditors receive cryptocurrency or USD?
• Why am I being asked to complete another AML/KYC Compliance check?
• Can I request that my distribution be sent to somebody else? 

Who is eligible to receive the second distribution?

Under the Plan of Reorganization, creditors in Class 2 (Retail Borrower Deposit Claims), Class 5 (General Earn Claims), Class 7 (Withhold Claims), Class 8 (Unsecured Loan Claims), and Class 9 (General Unsecured Claims) (collectively, the “Eligible Creditors,” and each, an “Eligible Creditor”) may be entitled to receive a second distribution. 

Who is not eligible to receive the second distribution?

Creditors with claims that are not entitled to Illiquid Recovery Rights, including creditors with claims in Class 4 (Convenience Claims), Class 6A (General Custody Claims), Class 6B (Withdrawable Custody Claims), and Class 11 (De Minimis Claims) are not eligible for this distribution.

If I am eligible to receive the second distribution, why is my distribution held back?

Some eligible creditors hold claims that are not eligible for distributions under the Plan at this time. 

Distributions cannot be made to creditors with the following conditions:

1. The Litigation Administrator has not resolved a litigation-related issue, such as withdrawal preference disputes or other legal issues.

2. The creditor has opted out of the Class Claim Settlement when voting on the Plan and filed a proof of claim.

3. The creditor’s account is missing information required to complete a compliance review. 

4. The creditor is located in a jurisdiction where regulations or sanctions prevent the distribution of cryptocurrency or USD to a creditor or the creditor’s location.

If a creditor’s claim is not yet allowed and such creditor was scheduled to receive cryptocurrency as of the Effective Date or is an Eligible Corporate Creditor, Celsius will hold cryptocurrency on account of such creditor’s claims that are not currently allowed. If the creditor was scheduled to receive USD as of the Effective Date, Celsius will hold USD on account of such creditor’s claims that are not currently allowed.

Once the issue holding back the distribution is resolved, or the Litigation Administrator otherwise notifies the Plan Administrator that a claim is allowed, a distribution will be attempted on account of such newly allowed claim. However, there may be a delay as distributions are processed in batches.

If regulations or sanctions prevent distributing cryptocurrency or USD to a creditor or to such a creditor's location, that creditor will not receive a distribution at this time.

Who is eligible to receive cryptocurrency for the second distribution?

Creditors who are currently scheduled to receive a cryptocurrency distribution through PayPal or who have successfully received a cryptocurrency distribution through Coinbase as of November 25, 2024, will receive their second distribution in cryptocurrency. In addition, corporate creditors who elected to receive cryptocurrency in the Corporate Creditor Settlement Order and who successfully onboard at Coinbase will also receive the second distribution in cryptocurrency.

What cryptocurrency is being distributed?

After receiving USD from the Litigation Administrators, Celsius converted the USD to BTC (Bitcoin) for distribution to creditors who are assigned to receive cryptocurrency. As part of this distribution, Celsius will not be distributing ETH (Ethereum), only BTC.

Which creditors will receive USD?

If a creditor is currently scheduled to receive a USD distribution, including because there is no cryptocurrency distribution agent reasonably available to make a cryptocurrency distribution to such creditor or such creditor elected to receive a distribution in USD, Celsius did not convert to BTC any USD from the Litigation Recovery Account allocated for distributions to such creditors.

How will I be notified about the details of my second distribution?

Creditors assigned to receive cryptocurrency via PayPal, Venmo, or Coinbase will receive an email with instructions on how to complete their second distribution. In most cases, creditors may receive their second distribution in USD if they cannot receive it via their respective original distribution method.

Creditors assigned to receive USD will receive their second distribution using the same details provided for the first distribution. In some cases, including if a creditor has not already successfully received a USD distribution, creditors may be directed to the Celsius Claims Portal to update their information or provide new details to receive a USD distribution.  

I still haven’t gotten my first distribution. Will I get the second distribution?

If an Eligible Creditor has a claim that is currently allowed and has not yet received such creditor’s initial distribution, Celsius will continue attempting to make both the initial and second distributions. In some cases, creditors may be directed to the Celsius Claims Portal to update their information or provide new details to receive a USD distribution. 

Creditors who have not received their distributions should also submit a customer support inquiry to help resolve their respective issue.

If my information has changed, does this impact my Distribution Partner? 

For the second distribution, the same Distribution Partner used for the initial distribution will be used, if possible. If a creditor needs to update such creditor’s information or has moved to a jurisdiction that is no longer supported by such creditor’s assigned Distribution Partner, the creditor may be re-routed to a new Distribution Partner and should submit a customer support inquiry. In some cases, creditors may be directed to the Celsius Claims Portal to update their information or provide new details to receive a distribution.

I was assigned to receive cryptocurrency at Coinbase but still haven’t gotten my first distribution and can no longer be serviced at Coinbase. What happens to my first and second distributions?

If a creditor was scheduled to receive a distribution through Coinbase on the Effective Date but did not successfully receive such creditor’s initial distribution by November 25, 2024 (the last distribution attempted by Coinbase to creditors who have not successfully received a distribution), such creditor will most likely receive a USD distribution. Celsius will hold cryptocurrency for that creditor’s first and second distributions and will convert such cryptocurrency to USD as close as practicable to the expected USD distribution date.

What are the recovery rate details of this second distribution?

As a result of the second distribution, each Eligible Creditor will receive a cumulative distribution in USD or cryptocurrency equal to about 60.4% of the value of such creditor’s Claims as of the Petition Date. $95,836.23 is the weighted price at which Celsius purchased BTC using the funds from the Litigation Administrator.

As further explained in the notice filed with the Bankruptcy Court, some creditors received an initial distribution based on a recovery rate of 57.87%, while others received a distribution based on a recovery rate of 57.65%. The actual recovery rate for the initial distribution was 57.65%. Those who received a larger initial distribution (based on the 57.87% recovery rate) will receive a smaller second distribution to balance out this difference.

Will Corporate Creditors receive cryptocurrency or USD?

Eligible Corporate Creditors who selected Cash or Liquid Cryptocurrency on their completed and accepted Election Form will receive the second distribution according to such elections. 

Corporate creditors who missed the November 4, 2024, deadline for the Election Form or submitted incomplete or incorrect forms will receive their distribution in USD. 

If a corporate creditor is located in a jurisdiction that is not serviced by Coinbase and thus was not an Eligible Corporate Creditor, such corporate creditor will receive a Cash distribution if such creditor is eligible to receive a second distribution.

Corporate creditors with Convenience Class Claims are not eligible for the second distribution.

Why am I being asked to complete another AML/KYC Compliance check?

All Eligible Creditors must complete AML/KYC checks for their Celsius Account and may need to provide additional information to their Distribution Partner. If a creditor needs to update such creditor’s personal information, including because such creditor’s account is missing information necessary to make a distribution, the creditor will be notified via email and must submit the required updates. Such creditors may be directed to the Celsius Claims Portal to update their information or provide new details to receive a USD distribution.

Can I request that my distribution be sent to somebody else? 

Distributions will be made to the Holder of record as of the Distribution Record Date (November 9, 2023). Pursuant to the Plan, if a creditor transferred a claim twenty or fewer days prior to the Distribution Record Date, Celsius will honor the transfer to the extent practicable and only in the event the claims transfer form contains an unconditional and explicit certification and waiver of any objections to the transfer by the transferor.