Celsius Resolves Bankruptcy, Commits $3 Billion Crypto Distribution to Creditors

Celsius has successfully emerged from bankruptcy proceedings and is now set to disburse over $3 billion to its creditors, alongside offering them a stake in the newly established Ionic Digital Inc. mining venture. This announcement came via a statement released by the company on Wednesday. Approximately 98% of Celsius Network’s creditors approved the outlined plan following 18 months of deliberations in bankruptcy court. Upon receiving necessary approvals, Ionic is anticipated to transition into a publicly traded entity.

David Barse and Alan Carr, members of the special board committee overseeing the bankruptcy proceedings, expressed satisfaction with the outcome, highlighting efforts to salvage Celsius amidst initial assumptions of its demise. They detailed actions taken to safeguard the platform’s cryptocurrency assets, negotiate with creditors, restructure operational segments, and resolve legal disputes with U.S. regulatory agencies.

Matt Prusak, previously serving as the chief commercial officer at Hut 8, has been appointed as the CEO of Ionic, entrusted with managing its mining operations.

In a separate disclosure, PayPal and Coinbase will handle the distribution of cryptocurrencies. Notably, Celsius will not facilitate distributions through its mobile or web applications, which are scheduled for closure around February 28.

Furthermore, during the bankruptcy proceedings, Celsius reached a $4.7 billion settlement with U.S. authorities concerning fraud allegations. Former CEO Alex Mashinsky, who resigned in September 2022, faced arrest on fraud charges related to alleged manipulation of the CEL token’s price—a claim he denies. Mashinsky has been released on a $40 million bond, with his banking and real estate assets subject to freeze pending trial proceedings scheduled for September 2024.