Celsius Network Announces Escape From Bankruptcy, Distributes Over $3B to Creditors

Bits Logics Team . 01st Feb 2024

• Celsius Network announced that it emerged from bankruptcy after completing the transactions outlined in its reorganization plan.
• The plan, approved by approximately 98% of the account holders, marks the conclusion of an eighteen-month process.
• The company’s reorganization plan includes the distribution of over $3 billion in crypto and fiat to Celsius’ creditors.

Celsius Network has officially announced that it has emerged from bankruptcy after completing the transactions outlined in its confirmed plan of reorganization. The plan, approved by approximately 98% of the company’s account holders and confirmed by the Bankruptcy Court for the Southern District of New York on November 9, 2023, marks the conclusion of an exhaustive eighteen-month process.

The company’s reorganization plan includes the distribution of over $3 billion in cryptocurrency and fiat to Celsius’ creditors. Additionally, a new Bitcoin mining company, Ionic Digital, Inc., has been established, owned by Celsius’ creditors, with mining operations managed by Hut 8 Corp.

The MiningCo Transaction, approved by the Bankruptcy Court on December 27, 2023, involves the distribution of liquid cryptocurrency and fiat to creditors. The plan was adjusted in response to feedback from the Securities and Exchange Commission (SEC), resulting in an increased amount of cryptocurrency available for distribution, reaching nearly $250 million through altcoin conversions and previous settlements.

Chris Ferraro, Plan Administrator and former Chief Restructuring Officer, Interim CEO, and CFO, emphasized the commitment to maximizing value and speed for creditors. Distributions, comprising cryptocurrency, fiat, and stock in Ionic Digital, have commenced following the confirmation of the plan.

David Barse and Alan Carr, members of the Special Committee of the Board of Celsius, highlighted the collaborative effort that steered the company through the Chapter 11 process. Despite initial assumptions about the company’s disappearance, Celsius successfully navigated legal, regulatory, and business challenges, settling with various stakeholders, including the DOJ, SEC, and CFTC.

To ensure secure and compliant distributions, Celsius coordinated with the Official Committee of Unsecured Creditors (UCC) and relevant regulatory agencies throughout the restructuring. Matt Prusak, Chief Commercial Officer at Hut 8, has been named CEO of Ionic Digital, overseeing its Bitcoin mining business.