On January 31, 2024, Celsius Network LLC successfully emerged from bankruptcy. The company completed its reorganization plan, which the Bankruptcy Court confirmed on November 9, 2023. The next stage is the distribution of more than $3 billion in cryptocurrency and fiat to Celsius’ creditors. Let’s get into the details!
More Info on Celsius: Celsius Moves $1B in Ethereum
A New Chapter Begins
Things got a lot better from the moment when Alex Mashinsky said that the “sharks of Wall Street” smelled blood in the water and “took down all of Celsius”. The cryptocurrency lender announced the closing of its bankruptcy process.
The recipients can expect assets in crypto, fiat, and common shares of a new Bitcoin mining company, Ionic Digital. Such a decision was supported by 98% of account holders.
What’s that you ask? From that point, Celsius will work in the realm of $BTC mining. The deal was that Iconic Digital is expected to launch an IPO once it receives the necessary approvals. Under a management agreement, Hut 8 will oversee Ionic’s operations for the next four years.
According to a report from Spot On Chain, Celsius has made another deposit of 67,500 ETH on Coinbase Prime in the last two days, which is worth around $156.5 million. Since November 13, 2020, the platform has transferred a whopping total of 847,626 ETH, which adds up to approximately $1.9 billion, to the exchange.
Also, this reorganization implies a phased wind-down of operations with the closure of the mobile app and web platform at the end of February.
So, Ionic Digitial “will continue to make payments to creditors,” and its shares are expected to “be publicly traded after obtaining the necessary approvals.”
Of note, it was previously thought that Celsius creditors would receive partial compensation – about $2 billion. As you can see, some positive adjustments were made to the overall plan in the end.
The money to creditors will come very soon, though. The lawsuit documents state that the distribution of funds began on January 31, 2024. According to the papers, the process will be handled by PayPal and Coinbase.
Finance executives that led Celsius through the bankruptcy process, David Barse and Alan Jeffrey Carr, gave an inspiring comment on it: “Everyone assumed Celsius would disappear completely like the other crypto lenders that were filing bankruptcy around the same time. Our exit from bankruptcy is the culmination of an extraordinary team effort.”
Just a Couple More Facts to Recall
It was September 2022, when the head of the Celsius platform, Alex Mashinsky (the one with sharks), left the post of CEO. Already in early 2023, the New York Attorney General’s office got him accused of defrauding investors “for billions of dollars”. It ended up with seven criminal charges against him in July 2023. The list of accusations was full of securities fraud, manipulating the price of the CEL token, misleading investors, and what’s not.
However, the company settled with the U.S. Federal Trade Commission for $4.7 billion later.
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