Celsius Exits Chapter 11 with $3 Billion Settlement for Creditors

The successful emergence from bankruptcy

In an official announcement, Celsius was delighted to announce that it has emerged from Chapter 11 bankruptcy and successfully started distributing $3 Billion in crypto or fiat to its creditors. The company completed the transactions under its confirmed plan of reorganization, which was overwhelmingly approved by approximately 98% of the company’s account holders and confirmed by the Bankruptcy Court for the Southern District of New York.

The reorganization plan

The company’s reorganization plan includes creating a new Bitcoin mining company called Ionic Digital Inc, owned by creditors to resolve financial obligations, especially to the victims of its close down years ago. Additionally, it includes distributing over $3 billion of cryptocurrency and fiat to Celsius’ creditors, with distributions via PayPal and Coinbase only. Creditors will no longer have access to Celsius Apps and the records contained therein. The funds for creditor distribution were boosted by nearly $250M by converting altcoins to Bitcoin and Ethereum and gains from previous settlements.

Celsius’ transition to the “MiningCo Transaction”

Following the confirmation of the plan, Celsius will transition to the “MiningCo Transaction.” Matt Prusak, Chief Commercial Officer of Hut 8, has been named CEO of Ionic Digital and will collectively work with the previously announced Board of Directors. Leadership expressed how creating the best outcome for creditors by maximizing value and speed was crucial, marking a triumphant emergence after an 18-month struggle to settle legal and business issues.

Hot Take

The long 18-month struggle ended well for enhanced recovery for customers and claim holders. The company successfully emerged from bankruptcy, settled with the preferred shareholders, and auctioned the reorganization plan to begin as a new Bitcoin mining company. It also settled with the DOJ, SEC, and CFTC, highlighting a successful outcome and extensive collaboration between Celsius, Hut 8, strategic partners, and creditors.