Celsius Begins Third Distribution with $220M Payout to Creditors

Highlights:

• Celsius begins third distribution, distributing $220.6 million to creditors.
• The total creditor recovery now stands at 64.9% with a goal of 67–85%.
• Creditors may also receive equity in Ionic Digital, a Bitcoin mining firm.

Celsius Network officially announced the third distribution to its creditors. According to the announcement, the platform will begin to distribute $220.6 million on August 20, 2025. The payout includes both cash and cryptocurrency settled through PayPal, Coinbase, Venmo, and Hyperwallet. This is part of an ongoing effort after Celsius reached an agreed reorganization plan in 2023, which was supported by 98% of its creditors. Earlier issued distributions were $2.53 billion and $127 million. The overall recovery rate has now risen to 64.9%.

Celsius will begin a third distribution of $220.6 million to eligible creditors. More info here: https://t.co/A5VoaG7CCJ

— Celsius (@CelsiusNetwork) August 19, 2025

Celsius Begins Third Distribution as Total Recovery Hits 64.9%

This latest round, as per the court filing, brings the creditor recovery of Celsius closer to the target of 67-85%. The funds are distributed in Bitcoin and Ethereum. U.S. dollars may instead be issued to select users, mainly corporate clients. The plan also includes equity in Ionic Digital, the mining firm owned by Celsius.

The source of this distribution is demonstrated in legal filings. Celsius tapped into contingent and disputed claims in an $86.4 million capital drawdown. There was also an amount of $46.3 million in forfeited claims. Moreover, expunged claims brought in an additional $7.7 million. The remaining $17 million came about in the form of disallowed claims with former CEO Alexander Mashinsky and related parties. 

Approximately $63.2 million has been allocated to the legal and administrative costs. The portal insisted on the importance of users updating their claims portal details. This guarantees prompt payouts and prevents delays in processing. To access their funds, all users have to undergo KYC checks. Furthermore, the date of distribution and eligibility depend on claim status.

Mining Firm and Lawsuit Support Broader Recovery Strategy

The introduction of Ionic Digital Inc. is one of the essential components of the recovery strategy. Ionic Digital is a Bitcoin mining company that focuses on recovering value from lost creditors. Equity ownership of the firm may be given to some creditors. This strategy would assist in increasing overall recovery up to 85%.

Celsius is still engaging in legal issues. A United States bankruptcy judge allowed the litigation of Celsius against Tether to continue. The judge decided that the claims of breach of contract and fraud could proceed. Celsius claimed that Tether cost them billions by selling Bitcoin in early 2022.

Celsius just won a major round in its $4B lawsuit against Tether.

A U.S. judge says the case can move forward over claims that Tether sold 39,500 $BTC early during the 2022 crash, breaking their deal.

If Celsius wins, this could set a BIG example for how crypto firms are… pic.twitter.com/JfVmZocNS4

— Greg Miller (@greg_miller05) July 2, 2025

The court ruled that there were enough ties between the operations of Tether and the United States, showing that the case should not be a foreign matter. While not all charges were upheld, the central claims remain active in court.

Recovery Approaches Final Phase with Focus on Efficiency

As Celsius begins its third distribution, most users are seeing progress in their claims. According to the firm, 93% of the initial money due has been paid out. Moreover, the rest will be managed in phases and are subject to verification and legal clearance. The collapse was preceded by risky lending and the volatility of the crypto market in July 2022. Furthermore, the crisis was worsened by exposure to Terra-Luna and other DeFi protocols. Celsius filed for Chapter 11 bankruptcy after having a $1.2 billion balance-sheet deficit.

The present recovery plan has returned much of the user funds lost despite the collapse. With the third distribution in progress, it is now time to focus on final recoveries and equity distributions. Meanwhile, Celsius has warned its users to be aware of phishing attempts and only to use official communications. During the repayment periods, there have been more fraudulent activities.