Following an arduous bankruptcy process, Celsius, the crypto lending platform, has concluded its restructuring efforts and is set to distribute over $3 billion to its creditors as part of the firm’s emergence from bankruptcy.
In a statement released on Wednesday, Celsius revealed that creditors will not only receive cash but also a stake in the newly formed Ionic Digital Inc. mining operation. This milestone comes after approximately 98% of Celsius Network’s creditors endorsed the plan, marking the closure of the bankruptcy proceedings that lasted 18 months. Ionic Digital Inc. is poised to transition into a publicly traded company upon securing requisite approvals.
David Barse and Alan Carr, members of the special board committee overseeing the bankruptcy proceedings, expressed their satisfaction with the outcome. They highlighted the successful preservation of Celsius’ cryptocurrency platform, negotiation of creditor agreements, reorganization of viable business segments, and resolution of legal matters with regulatory authorities including the U.S. Department of Justice, Securities and Exchange Commission, and Commodity Futures Trading Commission.
Matt Prusak, currently serving as the Chief Commercial Officer of Hut 8, will assume the role of CEO at Ionic Digital Inc., which will manage the mining operations.
In a separate disclosure, Celsius announced that distribution of cryptocurrencies will be facilitated by industry giants PayPal and Coinbase. Notably, Celsius will not conduct distributions through its mobile or web applications, which are slated for shutdown around February 28.
The bankruptcy proceedings also saw Celsius reach a $4.7 billion settlement with U.S. authorities over fraud allegations. Former CEO Alex Mashinsky, who resigned in September 2022, faces fraud charges related to allegedly manipulating the price of Celsius’ CEL token. Mashinsky, who denies the allegations, was released on a $40 million bond, with his banking and real estate assets subject to a court-ordered freeze. His trial is scheduled for September 2024.
The conclusion of Celsius’ bankruptcy proceedings marks a significant milestone for the company as it strives to rebuild and restore confidence within the crypto lending ecosystem following a tumultuous period of legal and financial challenges.
