Celsius Rises From Bankruptcy, Distributes $3B Crypto to Creditors

• Celsius to Distribute Over $3 Billion to Creditors Following Bankruptcy Closure
• Bankruptcy Proceedings and Company Reorganization
• New Leadership for Ionic Digital Inc.
• Cryptocurrency Distribution by PayPal and Coinbase
• Multibillion-Dollar Settlement with U.S. Authorities

Celsius to Distribute Over $3 Billion to Creditors Following Bankruptcy Closure

Celsius has officially completed its bankruptcy process and is expected to distribute more than $3 billion to its creditors. In addition to the cash, the creditors are set to gain a stake in Ionic Digital Inc., a new mining operation, according to a company statement released on Wednesday. It is estimated that about 98% of Celsius Network's creditors gave their approval to the plan, after a period of 18 months in bankruptcy court. Once regulatory approvals are obtained, Ionic is projected to become a publicly traded company.

Bankruptcy Proceedings and Company Reorganization

In June 2022, many speculated that Celsius may undergo the same fate as other crypto lenders filing for bankruptcy during the same period, and dissolve entirely. However, a special board committee, comprising David Barse and Alan Carr, managed to salvage the platform's cryptocurrency, negotiate agreements with creditors, and reorganize the components of the company that could continue. They also settled cases with regulatory bodies such as the U.S. Department of Justice, Securities and Exchange Commission, and Commodity Futures Trading Commission.

New Leadership for Ionic Digital Inc.

As part of the changes, Matt Prusak, the chief commercial officer of Hut 8, the company managing Ionic's mining operations, has been appointed as the CEO of Ionic.

Cryptocurrency Distribution by PayPal and Coinbase

In a different announcement, Celsius confirmed that both PayPal and Coinbase will handle the distribution of cryptocurrencies. Celsius will not make any distributions via their mobile or web applications, which are slated for closure on or around February 28.

Multibillion-Dollar Settlement with U.S. Authorities

As a part of its bankruptcy process, Celsius also resolved a $4.7 billion dispute with U.S. authorities over fraud allegations. The former CEO of Celsius, Alex Mashinsky, who resigned in September 2022, was apprehended on fraud charges for purportedly manipulating the price of the company's CEL token, an accusation that he has refuted. Mashinsky was released on a $40 million bond, with his banking and real estate assets placed under a freeze by court order. His trial is scheduled for September 2024.

Edited by Jonathan Stoker