YEREVAN (CoinChapter.com) — Embattled cryptocurrency lending platform Celsius Network has remerged from Chapter 11 bankruptcy in the United States, the company revealed in an official statement. According to the announcement, the firm has started distributing over $3 billion in crypto and fiat to its creditors. Moreover, it will launch a new Bitcoin (BTC) mining firm as part of the bankruptcy exit plan approved by 98% of its creditors.
As the Jan. 31 press release further revealed, Ionic Digital, Inc., the upcoming Bitcoin mining company, will be managed by crypto mining firm Hut 8. Matt Prusak, the Chief Commercial Officer of Hut 8, will head the firm. Once the firm receives the requisite approvals, the Ionic Digital stock will begin to trade publicly.
For the uninitiated, Celsius Network filed for bankruptcy in July 2022, a month after it paused all withdrawals.
Celsius Network Bankruptcy fiasco over?
In July 2023, Cesiss started taking active steps to put together funds to repay its creditors. Among the steps it took, under its earlier announcement, was the sale of customers’ deposits to use the funds to buy Bitcoin (BTC) and Ethereum (ETH) tokens.
As a result, the company transferred $25 million worth of altcoins to crypto trading platforms to exchange them with BTC and ETH.
The move, which came days after the arrest of Alex Mashinsky, the former CEO of Celsius Network, created much Yannick in the crypto market. His arrest came after the US Securities and Exchange Commission (SEC) filed fraud charges against Mashinsky.
Earlier this month, the firm also announced plans to unstake 206,300 Ethereum tokens, valued at around $468 million. This move sent jitters in the market, as investors feared it would flood the market, pushing the ETH price down.
However, the Celsius bankruptcy trustees overseeing the process are pleased with the outcome.
“When we were appointed in June 2022, everyone assumed Celsius would disappear completely like the other crypto lenders that were filing bankruptcy around the same time. We, however, believed that Celsius could navigate complicated legal, regulatory, and business issues,”
David Barse and Alan Carr, members of a special board that steered Celsius through Chapter 11 bankruptcy.
As posts on social media platform X reveal, creditors in the US will receive their funds via apps like PayPal and Venmo. Additionally, many users, especially those outside of the US, can receive their funds through Coinbase.
Following fund distribution to creditors, the firm will pursue an orderly wind-down of its operations. As part of this, it will discontinue the Celius mobile and web applications.
