Crypto lending firm Celsius announced late Wednesday that it has emerged from bankruptcy, having completed the requirements of the restructuring proceedings. The firm would now resume normal operations after getting the nod from 98% of its account holders and legal authorities, it stated.
A major factor aiding its recovery from its eighteen-month exile was its agreement to repay its creditors. Celsius announced it has started distributing $3 billion in cryptocurrency and fiat to its users, a $250 million increment from the amount it intended to disburse.
Celsius started its reorganization plan in November after the New York bankruptcy court approved the move. The former lender’s reorganization plan also involved a switch to crypto mining, a business it once invested heavily in.
From Lending to Mining
Per agreement with the Securities and Exchange Commission (SEC), Celsius would open a Bitcoin mining company, Ionic Digital, Inc., owned by its creditors. Crypto mining firm Hub 8 will oversee the day-to-day operations of Ionic Digital.
Celsius noted that creditors will hold equities in Ionic Digital, and it will use proceeds from the firm to offset outstanding debts completely. Matt Prusak will act as the CEO of the new mining firm, which will be publicly traded pending approvals.
Team Effort
“Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors,” David Barse, a member of the restructuring committee, said.
Celsius filed for bankruptcy in July 2022. Two months later, its CEO, Alex Mashinsky, resigned. Before his resignation, he proposed that the restructuring team convert Celsius to a crypto custodian, a suggestion that helplessly flew past the Special Committee of the Board of Directors of Celsius Network.
