Celsius Exits Bankruptcy, Will Distribute $3 Billion to Creditors
Embattled cryptocurrency lending platform Celsius Network formally emerged from bankruptcy this week. As part of its court-approved resolution, Celsius will distribute over $3 billion to creditors. Additionally, they plan to launch a new Bitcoin mining firm before moving to wind down its remaining operations.
Key details on the firm’s winding down and exit from bankruptcy:
- Celsius to distribute over $3 billion in crypto, fiat currency, and equity to account holders.
- The lender received approval to start Bitcoin miner Ionic Digital.
- Ionic Digital will be publicly traded once the necessary approvals are secured.
- The firm confirmed it is discontinuing its mobile apps and ceasing operations.
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Celsius began facing trouble when it froze customer accounts in mid-2022 amidst steep losses, setting off an ugly spiral into bankruptcy. However, after a complex restructuring, the embattled lending platform won court approval for its strategy to make account holders whole.
Celsius to start Bitcoin mining firm
On Wednesday, Celsius shared the approved gameplan, announcing the distribution of over $3 billion worth of cryptocurrency, fiat assets, and shares in a newly launched Bitcoin mining outfit called Ionic Digital. The majority of Celsius account holders will own Ionic Digital, with Hut 8 Corp. managing the miners.
The firm’s CRO, Chris Ferraro, celebrated the customer payout commencement. “Today, over 18 months after Celsius paused withdrawals, we began distributing over $3 billion of cryptocurrency, fiat, and stock,” he stated. Nearly 98% of account holders approved the repayment plan.
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With customer distributions initiated, the firm is now beginning an orderly wind-down process to close the rest of its business. This includes discontinuing its mobile apps and ceasing crypto lending and trading activities that created instability last year.
