Celsius Starts Distribution of Over $3B in Crypto to Creditors After Bankruptcy

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  • Celsius Network LLC has started distributing over $3 billion in cryptocurrency, fiat, and stock to creditors as part of its exit from Chapter 11 bankruptcy, a move approved by the Bankruptcy Court and its account holders.
  • The company’s reorganization plan includes the creation of a new Bitcoin mining company, Ionic Digital, Inc., owned by the creditors, as part of its strategy to resolve its financial obligations and wind down operations.
  • In coordinating with the SEC and UCC, Celsius increased the distribution amount by nearly $250 million by converting altcoins to BTC or ETH and from previous settlements, marking a significant phase in their financial restructuring.

Celsius Network LLC, a once-prominent player in the cryptocurrency lending space, has initiated the distribution of over $3 billion in cryptocurrency and fiat to its creditors. This move comes after the company’s recent emergence from Chapter 11 bankruptcy, marking a notable development in its restructuring efforts.

The bankruptcy exit follows the approval of Celsius’ reorganization plan by the Bankruptcy Court and its account holders. The plan’s execution entails significant distributions to creditors, who have been waiting quite a ways ever since the company was forced to cease operations and work on try to work on its restructuring plan.

Under the approved plan, a new Bitcoin mining entity, Ionic Digital, Inc., will be established and owned by the creditors. This strategic shift into Bitcoin mining indicates a redirection of business focus following the bankruptcy proceedings.

In agreement with the SEC and the Official Committee of Unsecured Creditors (UCC), the company is now officially pivoting to the “MiningCo Transaction,” as outlined in their Plan. This strategic transition is enhanced by a substantial increase in available funds for creditor distribution – nearly $250 million. This boost comes from converting various altcoins to Bitcoin and Ethereum, alongside gains from previous settlements. This plan, including the significant MiningCo Transaction, received the green light from the Bankruptcy Court on December 27, 2023, marking a key moment in Celsius’ ongoing financial saga.

Chris Ferraro, previously holding multiple key roles including Chief Restructuring Officer and CFO at Celsius, emphasized the company’s commitment to creating the most beneficial outcome for creditors by focusing on maximizing value and expediting the process. He highlighted that, after more than 18 months since Celsius halted withdrawals, they have commenced the distribution of over $3 billion in cryptocurrency, fiat, and Ionic Digital stock to their creditors.

The journey of Celsius through bankruptcy and its eventual emergence with a repayment plan highlights the complexities and risks inherent in the cryptocurrency market. The company’s coordination with stakeholders and regulatory bodies has no doubt played a significant role in this notable outcome.