More than 18 months after filing for Chapter 11 Bankruptcy in the U.S., crypto lending firm Celsius has emerged from bankruptcy and started paying out creditors.
In a Wednesday press release, the firm announced that it had completed the transactions under its confirmed reorganization plan, which was approved by 98% of its account holders.
As per the terms of this plan, Celsius will start distributing $3 billion worth of cryptocurrency and fiat to its creditors, with the company saying that it had increased the amount available to creditors by $250 million by converting altcoins to Bitcoin (BTC) and Ethereum (ETH).
Indeed, on-chain data confirms that Celsius has been making high value deposits to crypto exchanges over the last few months. Spot On Chain noted that some of the $1.9 billion sent to exchanges might have been absorbed by larger players via an over-the-counter (OTC) deal.
— Spot On Chain (@spotonchain) February 1, 2024
Celsius’ bankruptcy plan also involves the creation of a new Bitcoin mining company, called “Ionic Digital,” which will be managed by Nasdaq-listed mining firm Hut 8.
The Ionic Digital stock will likely also be publicly traded if the requisite approvals come through, and the firm will be owned by Celsius’ creditors, who will own equity in the form of common stock.
“Creating the best outcome for creditors by maximizing value and speed have been front of mind for Celsius throughout this process,” said Celsius’ Chief Restructuring Officer and interim CEO in a statement.
Meanwhile, Celsius former CEO Alex Mashinsky faces fraud and manipulation charges from the U.S. Department of Justice (DOJ) and his criminal trial is scheduled to commence in September this year.