9 months ago
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Celsius also took this opportunity to launch Ionic Digital, a new Bitcoin mining firm to be managed by Hut 8.
Crypto lender Celsius has emerged from Chapter 11 bankruptcy in the US, earmarking over $3 billion for distribution to creditors. Celsius also took this opportunity to launch Ionic Digital, a new Bitcoin mining firm. The company announced its successful reorganization and exit from bankruptcy proceedings earlier today at about 6 PM EST.
According to Celsius, Ionic Digital will be owned by Celsius creditors, with its mining operations managed by Hut 8 Corp. (Nasdaq | TSX: HUT) (“Hut 8”). Ionic Digital is expected to eventually trade publicly after receiving the necessary approvals.
With its emergence from bankruptcy, Celsius has also increased the pool of digital assets available for distribution to creditors by around $250 million. This was done through conversions to Bitcoin (BTC) and Ether (ETH) and through previous settlement agreements.
“Our exit from bankruptcy is the culmination of an extraordinary team effort,” said Celsius restructuring board members David Barse and Alan Carr, noting how “[everyone] assumed Celsius would disappear completely like the other crypto lenders.”
The company will now commence the process of returning more than $3 billion to its creditors. This includes over one million retail users who held accounts on the Celsius platform. Specific details on distribution methods and timelines are expected to be announced in the coming weeks. Celsius says that it has coordinated with the Official Committee of Unsecured Creditors (UCC) as well as federal and state regulatory agencies to facilitate the distributions.
Celsius gained significant attention in June 2022 when it paused all account withdrawals, swaps, and transfers between accounts due to “extreme market conditions.” After a month, Celsius filed for bankruptcy as its native token (CEL) continued to plummet. This decision crippled many retail crypto investors and marked one of the most dramatic early events of the recent cryptocurrency market crash.
Celsius is now winding down operations and discontinuing its mobile and web platforms to manage crypto loans and savings accounts. The company said it will maintain a minimal online presence to provide status updates and assist creditors throughout the distribution.
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