Celsius has concluded its Chapter 11 bankruptcy process and is embarking on a new journey with the launch of Ionic Digital, Inc., a bitcoin mining company managed by Hut 8 Corp. This development follows a complex legal and financial restructuring, which will include over $3 billion distributed to creditors.
Celsius Ends Bankruptcy Saga, Will Return $3 Billion to Creditors
After an eighteen-month bankruptcy process, Celsius Network LLC has emerged from Chapter 11, marking a turnaround in the cryptocurrency industry. The company announced today that it has completed the transactions under its reorganization plan, approved by 98% of its account holders and the Bankruptcy Court for the Southern District of New York on Nov. 9, 2023.
This event concludes a long journey for Celsius, during which the company fielded legal challenges, underwent audits by regulatory investigations, and had to gain stakeholder support. The plan includes distributing over $3 billion in cryptocurrency and fiat to creditors and establishing a new bitcoin mining entity, Ionic Digital, Inc., which will be managed by Hut 8 Corp.
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” said company representatives David Barse and Alan Carr.
Following the bankruptcy court’s approval, Celsius will transition to the “MiningCo transaction,” consistent with the plan to “maximize recoveries for the benefit of creditors.” The company also increased the availability of funds for creditors by nearly $250 million through altcoin conversions and previous settlements. The company has initiated distributions of liquid cryptocurrency and fiat to creditors, with Ionic Digital set to become publicly traded upon receiving necessary approvals.
Celsius has successfully emerged from bankruptcy on January 31, 2024, concluding the company’s restructuring process. You can read our official announcement here https://t.co/jqQfSzxPyg.
— Celsius (@CelsiusNetwork) February 1, 2024
Matt Prusak, Chief Commercial Officer at Hut 8, has been appointed CEO of Ionic Digital, which will operate under Hut 8’s management for the next four years.
As part of its restructuring, Celsius will wind down its operations, including discontinuing its mobile and web applications. The firm also addressed its legal challenges, including a $4.7 billion settlement with U.S. authorities over fraud allegations. Former CEO Alex Mashinsky, who resigned in September 2022, faces fraud charges for allegedly manipulating the lender’s CEL token price, which he denies. Mashinsky is currently out on a $40 million bond, with his trial scheduled for September 2024.
How do you think Celsius will fare moving forward as a bitcoin miner? Share your thoughts and opinions about this subject in the comments section below.
