Celsius, a crypto lending platform, has successfully emerged from Chapter 11 bankruptcy in the United States, setting aside over $3 billion for distribution to its creditors. In addition to this, the company seized the opportunity to launch Ionic Digital, a new Bitcoin mining firm. The announcement of its successful reorganization and exit from bankruptcy proceedings was made earlier today, around 6 PM EST.
Ionic Digital, according to Celsius, will be owned by the creditors of Celsius. The mining operations of the firm will be managed by Hut 8 Corp. (Nasdaq | TSX: HUT), also known as “Hut 8”. After receiving the necessary approvals, Ionic Digital is expected to trade publicly.
A New Chapter for Celsius
In the wake of its emergence from bankruptcy, Celsius has increased the pool of digital assets available for distribution to creditors by approximately $250 million. This increase was achieved through conversions to Bitcoin (BTC) and Ether (ETH), as well as through previous settlement agreements.
David Barse and Alan Carr, members of the Celsius restructuring board, expressed their satisfaction with the company’s exit from bankruptcy, describing it as the result of an extraordinary team effort. They highlighted the fact that many had assumed Celsius would vanish entirely, much like other crypto lenders.
The company is now set to begin the process of returning more than $3 billion to its creditors. This includes over a million retail users who held accounts on the Celsius platform. Specific details regarding distribution methods and timelines are expected to be announced in the coming weeks. Celsius has stated that it has coordinated with the Official Committee of Unsecured Creditors (UCC) and various federal and state regulatory agencies to facilitate these distributions.
Celsius attracted significant attention in June 2022 when it suspended all account withdrawals, swaps, and transfers between accounts due to “extreme market conditions”. A month later, as its native token (CEL) continued to plummet, Celsius filed for bankruptcy. This decision had a crippling effect on many retail crypto investors and marked one of the most dramatic early events of the recent cryptocurrency market crash.
Celsius is now in the process of winding down operations and discontinuing its mobile and web platforms for managing crypto loans and savings accounts. The company has stated that it will maintain a minimal online presence to provide status updates and assist creditors throughout the distribution process.
