Summary
Celsius Network has distributed $3 billion worth of cryptocurrency and fiat to its creditors after resolving its Chapter 11 bankruptcy. As part of the reorganization plan, creditors will own a new bitcoin mining company called Ionic Digital, which will be overseen by Hut 8. Celsius plans to phase out its operations and close down its applications. The company declared bankruptcy in July 2022 and faced lawsuits from regulators.
Key Points
1. Celsius Network has completed its Chapter 11 bankruptcy proceedings and has begun distributing $3 billion worth of cryptocurrency and fiat to its creditors. This comes after a pause in user withdrawals for 18 months.
2. As part of the approved reorganization plan, a portion of the $3 billion will be used to establish Ionic Digital, a new bitcoin mining company owned by creditors. Celsius creditors will own the mining company through common shares, which are expected to be publicly traded once necessary approvals are secured. Hut 8, a Miami-based mining company, will oversee Ionic’s mining operations under a four-year management agreement.
3. With the transition, Celsius plans to phase out its operations by closing down its mobile and web applications. The bankruptcy declaration by Celsius was prompted by a $1.2 billion gap in its balance sheet. The company and its founder, Alex Mashinsky, have faced legal challenges and regulatory scrutiny, with Mashinsky scheduled to go on trial for fraud in September.