Good news from Celsius! The crypto lending giant has successfully come out of Chapter 11 bankruptcy, and it’s ready to share a whopping $3 billion in crypto or cash with its creditors.
Celsius has effectively executed transactions under its reorganization plan, securing an overwhelming 98% approval from account holders. The confirmation from the Bankruptcy Court for the Southern District of New York on November 9, 2023, marks a crucial step forward.
Bright times ahead? Let’s read on!
The company’s reorganization plan includes creating a new Bitcoin mining company, which will be named Ionic Digital. Inc. The mining firm will be owned by its creditors to resolve financial obligations, especially to the creditors, who have been the victims due to its close down years ago. Creditors will own equity in the form of common stock. It was also announced that Hut 8 Corp will manage its mining operations.
Under the reorganization plan, Celsius is set to distribute over $3 billion in cryptocurrency and fiat to its creditors. Notably, the Debtors’ mobile and web applications will soon be closed, with creditor access ending by February 28, 2024. Exclusive handling of distributions by PayPal and Coinbase adds an extra layer of efficiency and security.
Funds available for distribution received a boost of nearly $250 million, achieved through altcoin conversion to Bitcoin and Ethereum, along with gains from previous settlements.
Read More: Celsius’ $35M Ethereum Sell-Off Sparks Concerns; Price at Risk of a Crash?
Strategic Transitions
Post-regulatory approvals, Celsius announces the transition to the “MiningCo Transaction.” Matt Prusak, Chief Commercial Officer of Hut 8, takes the helm as CEO at Ionic Digital, working alongside the existing Board of Directors to maximize value and speed.
Chris Ferraro emphasizes Celsius’ commitment to creditor value.
“Creating the best outcome for creditors by maximizing value and speed have been front of mind for Celsius throughout this process. Today, over 18 months after Celsius paused withdrawals, we began distributing over $3 billion of cryptocurrency, fiat, and stock in Ionic Digital to Celsius creditors.”
David Barse and Alan Carr, members of the Special Committee of the Board, commend the extraordinary team effort and express confidence in Celsius’s ability to navigate challenges.
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,”
They further added,
“When we were appointed in June 2022, everyone assumed Celsius would disappear completely like the other crypto lenders that were filing bankruptcy around the same time. We, however, believed that Celsius could navigate complicated legal, regulatory, and business issues.”
The challenging 18-month journey concludes with Celsius emerging victoriously from bankruptcy, ensuring enhanced recovery for customers and claim holders. The company came out of bankruptcy and settled with the preferred shareholders. It successfully auctioned the reorganizable plan to begin as a new Bitcoin mining company.
Most importantly, it settled with the Department of Justice (DOJ), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC).
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