Celsius Network, a well-known platform for lending cryptocurrency, has officially concluded its bankruptcy proceedings, marking a significant achievement. In a statement released on Wednesday, the company declared that it would distribute over $3 billion to its creditors. Additionally, creditors will receive a share in the newly established mining operation of Ionic Digital Inc., which is expected to go public once it obtains the necessary approvals.
Overcoming challenges and protecting currencies
The journey to recovery for Celsius Network has been difficult, but the successful outcome has brought relief to many stakeholders. David Barse and Alan Carr, members of the special board committee overseeing the bankruptcy, expressed their satisfaction with the result. They acknowledged that when they were appointed in June 2022, there were doubts about whether Celsius could survive the ordeal. However, they were able to safeguard the platform’s cryptocurrency holdings, negotiate agreements with creditors, and restructure the operational parts of the company.
Resolving legal matters was another crucial aspect of Celsius Network’s journey through bankruptcy. The company reached settlements with several U.S. regulatory authorities, including the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. These settlements were crucial in clearing the way for the company’s emergence from bankruptcy.
Celsius Network’s new leadership and distribution plans
With the bankruptcy process now in the past, Celsius Network is looking ahead to the future. Matt Prusak, the Chief Commercial Officer of Hut 8, the company responsible for managing Ionic’s mining operations, has been appointed as Ionic’s CEO. This appointment is a significant step in the company’s transition to its new phase.
In a separate filing, Celsius Network disclosed its plans for distributing cryptocurrencies. PayPal and Coinbase have been selected as the platforms to distribute these digital assets to creditors. It is important to note that Celsius will not distribute these assets through its mobile or web applications, which will be shut down around February 28.
Celsius Network gained attention during its bankruptcy due to a $4.7 billion settlement with U.S. authorities regarding fraud allegations. The allegations centered around former CEO Alex Mashinsky, who resigned in September 2022. He was arrested on fraud charges related to manipulating the price of the lender’s CEL token. However, Mashinsky vehemently denied these allegations and was released on a $40 million bond. His banking and real estate assets have been frozen, and his trial is scheduled for September 2024.
