In Bloomberg Law, Daniel Gwen Examines Creditor Recoveries After Crypto Bankruptcies

Last year crypto lender Celsius Network received U.S. bankruptcy court approval for a restructuring plan that would return cryptocurrency to customers and create a new company owned by Celsius creditors.

Litigation winnings in a new lawsuit filed against Celsius criminally indicted co-founder and other former leaders would add to the 67% to 85% recovery that customers are expected to receive on the debts they are owed under Celsius restructuring plan.

In a Bloomberg Law article, business restructuring counsel Daniel Gwen explained that in many bankruptcy proceedings unsecured and low-ranking creditors that may include customers, vendors and suppliers are often paid back at much lower rates.

Daniel said that by the good fortune of a crypto market recovery, several crypto companies including Celsius were able to liquidate their claims.

“The high recoveries should not distract from some hard lessons learned during the crypto winter, like ensuring that customers retain ownership over their assets,” said Daniel.