Popular crypto lender Celsius has announced that it has completed its financial restructuring efforts after recovering from its Chapter 11 bankruptcy. Accordingly, the crypto lender is now positioned to pay a total of $3 billion to its creditors in fiat and cryptocurrency.
Another good news is that Celsius is establishing Ionic Digital, a Bitcoin mining platform in partnership with Hut 8. As part of the agreement, Matt Prusak, the Chief Commercial Officer of Hut 8, will oversee the mining operations.
It is worth noting that Hut 8 is one of the world’s leading crypto-mining entities with an exceptional track record, expertise, and infrastructure. Incorporating Ionic Digital into Celsius’s framework is indispensable to its revival, especially in its creditor repayment plans.
In addition, it is expected that the shares of Ionic Digital will be listed on a public exchange, pending the acquisition of the necessary authorizations. Around 98% of Celsius’s creditors have approved the suggested insolvency exit strategy.
Recall that Celsius put an interim end to withdrawals in June 2022 and initiated the Chapter 11 bankruptcy proceedings the following month. However, the successful conclusion of these proceedings highlights Celsius’s commitment to effectively managing its problems, achieving agreement among stakeholders, and devising a strategy for financial transformation.
Payout Claims Form To Creditors
Furthermore, Celsius has increased the crypto assets available to pay creditors by about $250 million in BTC or ETH. According to the firm, the move is a strategic plan to expand the total distribution pool intended for creditors.
Meanwhile, the crypto lender’s latest court filing outlines its plan to end operations, with the shutdown of mobile and web applications set for February 28. However, credit payments will be made through PayPal, Coinbase, and Venmo services.
Following this development, some creditors have posted their claims form on the X platform (formerly Twitter) to indicate that the process has started. Contrary to concerns that Celsius would go under like other crypto lenders who went bankrupt during the same era, the company is making a unique exit.
According to David Barse and Alan Carr, members of the board monitoring Celsius’s bankruptcy proceedings, the team’s outstanding collective effort contributed to the company’s successful exit from bankruptcy.
Bankruptcy Settlement With US Federal Agencies
Celsius was subject to severe financial penalties due to its bankruptcy processes, eventually reaching a $4.7 billion settlement with the US Federal Trade Commission. The firm also achieved settlements with the Department of Justice (DoJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).
Nevertheless, Alex Mashinsky, its former CEO, is facing legal action from federal authorities, who have charged him with various financial fraud claims, including manipulating CEL’s price and providing inaccurate information to Celsius customers. Despite the allegations, Mashinsky has pleaded not guilty and is on bail with a $40 million bond, with his trial set for September 2024.