- Celsius Network successfully emerges from Chapter 11 bankruptcy, initiating distributions of over $3 billion in cryptocurrency and fiat to creditors.
- The establishment of a new Bitcoin mining company, Ionic Digital, Inc., owned by creditors and managed by Hut 8 Corp.
Celsius Network LLC, a once-troubled cryptocurrency platform, has announced a significant turnaround, successfully emerging from Chapter 11 bankruptcy. This emergence is marked by the completion of a reorganization plan, approved by 98% of the company’s account holders and confirmed by the Bankruptcy Court for the Southern District of New York.
A New Era for Celsius and Its Creditors
The plan includes a substantial distribution of over $3 billion in cryptocurrency and fiat to Celsius’ creditors. Additionally, a major highlight is the creation of a new Bitcoin mining company, Ionic Digital, Inc., which will be owned by Celsius’ creditors. The management of Ionic Digital’s mining operations will be overseen by Hut 8 Corp., a renowned name in the Bitcoin mining industry.
This outcome represents a significant accomplishment for Celsius, following eighteen months of navigating through complex legal issues, regulatory investigations, and building consensus among various stakeholders. Chris Ferraro, Plan Administrator and former Chief Restructuring Officer, emphasized that creating the best outcome for creditors by maximizing value and speed has been Celsius’s primary focus throughout this process.
Transition to MiningCo Transaction
Following feedback from the SEC on certain aspects of the Plan, Celsius, in collaboration with the Official Committee of Unsecured Creditors (UCC), transitioned to the
“MiningCo Transaction,”
in line with the Plan. This transition further increased the amount of cryptocurrency available for distribution to creditors by nearly $250 million through strategic conversions and settlements.
The Emergence of Ionic Digital
Today, the commencement of distributions and the creation of Ionic Digital mark a new chapter for the company. Ionic Digital is poised to be a publicly traded company, subject to requisite approvals. This initiative is expected to continue delivering recoveries to creditors, with equity ownership provided in the form of common stock.
David Barse and Alan Carr, members of the Special Committee of the Board of Celsius, expressed their pride in steering the company through its Chapter 11 process. They highlighted the successful settlement with various regulatory bodies and the preservation and distribution of cryptocurrency assets as key achievements.
Future Directions and Leadership
Matt Prusak, Chief Commercial Officer of Hut 8, has been appointed CEO of Ionic Digital. Under his leadership and a Board of Directors, primarily appointed by the UCC, Ionic Digital is set to make a significant impact in the Bitcoin mining sector.
As Celsius Network transitions to winding down its operations, including the discontinuation of its mobile and web applications, this development signals a positive turn in the saga of one of the cryptocurrency industry’s most closely watched bankruptcy cases.
For more information about the restructuring process, stakeholders can access details at https://cases.stretto.com/celsius. Celsius continues to make headlines as it navigates through this transformative phase, underscoring its resilience and innovation in the dynamic world of cryptocurrency and blockchain technology.