Celsius Network, a cryptocurrency lending platform, has successfully emerged from bankruptcy after completing its plan of reorganization.
The plan, which was approved by 98% of its account holders and the Bankruptcy Court, involved distributing over $3 billion of cryptocurrency and fiat to its creditors and creating a new Bitcoin mining company called Ionic Digital.
Ionic Digital, which will be owned by Celsius’ creditors and managed by Hut 8, is expected to be publicly traded soon.
The plan also included converting altcoins to BTC or ETH and settling previous disputes. Celsius Network had filed for bankruptcy in June 2022 after facing regulatory investigations and lawsuits from its customers.
“Creating the best outcome for creditors by maximizing value and speed have been front of mind for Celsius throughout this process,” said Chris Ferraro, Plan Administrator and former Chief Restructuring Officer, Interim Chief Executive Officer, and Chief Financial Officer. “Today, over 18 months after Celsius paused withdrawals, we began distributing over $3 billion of cryptocurrency, fiat, and stock in Ionic Digital to Celsius creditors.”
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” added David Barse and Alan Carr, members of the Special Committee of the Board of Celsius, who have been steering Celsius though its Chapter 11 process.
Barse and Carr continued: “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.
Among other achievements, Celsius secured the cryptocurrency on our platform, achieved a settlement with the preferred shareholders, ran a successful auction of the one reorganizable operating business to begin as a new Bitcoin mining company, established a litigation trust to pursue the innumerable counterparties that exploited Celsius and, possibly most importantly, settled with the DOJ, SEC, and CFTC.
But most of all, we are proud of the preservation and distribution of cryptocurrency assets and enhanced recovery for customers and claim holders.”
To facilitate secure, timely, and fully compliant distributions, Celsius and its advisors have coordinated with the UCC and certain federal and state regulatory agencies throughout its restructuring.
Matt Prusak, Chief Commercial Officer, Hut 8, has been named CEO of Ionic Digital and will work with the previously announced Board of Directors, a majority of which were appointed by the UCC.
Hut 8 will oversee Ionic Digital’s Bitcoin mining business under a four-year management agreement. Additional details on Ionic Digital will be forthcoming.
Celsius will now pursue an orderly wind down of its operations, including discontinuing the Celsius mobile and web applications.