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- Celsius Network has officially exited bankruptcy, with 98% of creditors approving its plan
- The approval will kickstart a $3 billion payout program for creditors
- A new Bitcoin mining firm, Ionic Digital, Inc., will be owned by creditors
Celsius has announced that it has formally emerged from bankruptcy and will embark on a $3 billion payout program to creditors. In a statement released yesterday, Celsius Network LLC announced that the plan had been approved by approximately 98% of the company’s account holders and as confirmed by the Bankruptcy Court for the Southern District of New York on November 9, 2023. The move marks the end of an 18-month process and the formation of a new Bitcoin mining company—Ionic Digital, Inc.—which will be owned by Celsius creditors.
18 Months of Negotiation Ends in Handshakes
Celsius was one of the earliest high-profile casualties of the crypto credit contagion, halting operations in July 2022 and leaving billions in customer funds trapped. Following lengthy consultations with creditors throughout 2023, and one or two aborted plans, an acceptable pathway was tabled in October that would see the creation of a Bitcoin Mining company owned by Celsius’ former customers and creditors and payouts of at least $2 billion.
These payouts will in fact be worth $3 billion and will be handled by PayPal and Coinbase. The deal was accepted by almost all creditors and was signed off by the bankruptcy court in November, with Celsius also making a $4.7 billion settlement with US authorities over fraud allegations.
Mashinksy Still Faces the Heat
The emergence from bankruptcy into its new guise might mark the severing of ties with the name Celsius for the company, but one man is still living very much with the heat brought about by the former company: former CEO Alex Mashinsky – who resigned in September 2022 – was arrested on fraud charges for allegedly manipulating the price of the lender’s CEL token, and faces trial in September this year.