Distribution of Over $3 Billion in Cryptocurrencies as Celsius Exits Bankruptcy
Celsius has announced a significant plan to repay its creditors, marking a turning point in its bankruptcy process. The company will distribute over $3 billion in cryptocurrencies, bringing an end to its 18-month period in bankruptcy court. Approximately 98% of Celsius Network’s creditors have approved the plan.
Ionic Digital Inc. and the Future of Celsius
In addition to cryptocurrency repayments, creditors will receive equity in Ionic Digital Inc., the new mining operation formed by Celsius. Members of the special board committee, David Barse and Alan Carr, highlighted the efforts made to secure the platform’s cryptocurrencies, negotiate an agreement with creditors, and resolve disputes with the US Department of Justice, SEC, and CFTC.
The firm has stated that the cryptocurrencies will be distributed via PayPal and Coinbase, not through Celsius’ mobile or web applications, which will be closed around February 28th. Matt Prusak, Chief Commercial Officer of Hut 8, the company managing Ionic’s mining, has been appointed CEO of Ionic.
Legal Background and Outlook
Celsius’ bankruptcy process also involved a $4.7 billion settlement with US authorities over allegations of fraud. Former CEO Alex Mashinsky, who was arrested on charges of manipulating the price of the company’s CEL token, has denied these allegations. Mashinsky has been released on $40 million bail, and his bank and real estate assets have been frozen pending his trial in September 2024.
