In its official
announcement
, the crypto lending company Celsius was delighted to announce that it has successfully emerged from Chapter 11 bankruptcy. The well-recognized leader in the crypto space has started distributing $3 Billion in crypto or fiat to its creditors.
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It completed the transactions under its confirmed plan of reorganization. The Plan was overwhelmingly approved by approximately 98% of the company’s account holders and confirmed by the Bankruptcy Court for the Southern District of New York on November 9, 2023.
The reorganization plan
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.
Secondly, the Plan includes distributing over $3 billion of cryptocurrency and fiat to Celsius’ creditors. It was also said that no distributions will be made via the Debtors’ mobile or web applications, which will be shut down soon.
Creditors will no longer have access to the Celsius Apps and the records contained therein around February 28, 2024. Instead, distributions on account of all claims will be made by PayPal and Coinbase only.
Funds available for creditor distribution were boosted by nearly $250M, achieved by converting altcoins to Bitcoin and Ethereum and gains from previous settlements.
Following the confirmation of the plan by the regulatory bodies, Celsius announced that it would transition to the “MiningCo Transaction.” Matt Prusak, Chief Commercial Officer of Hut 8, has been named CEO of Ionic Digital and will collectively work with the previously announced Board of Directors.
“Creating the best outcome for creditors by maximizing value and speed have been front of mind for Celsius throughout this process,” said Chris Ferraro, “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.”
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” added David Barse and Alan Carr, members of the Special Committee of the Board of Celsius who have been steering Celsius though its Chapter 11 process.
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 long 18-month struggle ended well for 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 DOJ, SEC, and CFTC.
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