Celsius Network Resolves Chapter 11 Bankruptcy and Distributes $3 Billion to Creditors
Celsius Network has successfully resolved its Chapter 11 bankruptcy and has begun distributing $3 billion worth of cryptocurrency and fiat to its creditors. This comes 18 months after the company temporarily halted user withdrawals. As part of the approved reorganization plan, a portion of the $3 billion will be used to establish Ionic Digital, a new bitcoin mining company owned by the creditors. The mining company will be publicly traded once necessary approvals are obtained, with Hut 8 overseeing its operations under a four-year management agreement.
Transitioning Away from Operations
With this transition, Celsius Network plans to close down its mobile and web applications as it phases out its operations. The decision to declare bankruptcy was made on July 13, 2022, when the company faced a $1.2 billion gap in its balance sheet.
Legal Challenges and Future Trials
Celsius Network and its former CEO Alex Mashinsky have faced legal challenges, including lawsuits from regulatory bodies such as the SEC, FTC, and CFTC for alleged customer deception. Mashinsky is also scheduled to face trial for fraud in September.
Hot Take: Celsius Network Emerges Stronger After Bankruptcy Resolution
Celsius Network’s successful resolution of its Chapter 11 bankruptcy and the distribution of $3 billion to its creditors marks a significant milestone for the company. By establishing Ionic Digital, a new bitcoin mining company owned by the creditors, Celsius Network ensures that it can continue to grow and adapt in the crypto industry. With plans to phase out its operations and close down its applications, Celsius Network is focusing on a new chapter in its journey. Despite legal challenges and upcoming trials, the company remains resilient and committed to providing value to its stakeholders.
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