Celsius Network to Distribute $3 Billion in Restructuring Plan

The bankrupt lending platform Celsius will distribute $3 billion to creditors under an approved restructuring plan.

This decision was supported by 98% of account holders and confirmed by the Southern District of New York court.

Recipients can expect assets in cryptocurrencies, fiat, and common stock of the new Bitcoin mining company Ionic Digital.

The latter is expected to conduct an IPO after obtaining the necessary approvals. Over the next four years, Hut 8 will oversee Ionic’s operations under a management agreement.

Payments will commence 18 months after the suspension of withdrawals, exchanges, and transfers between accounts “due to extreme market conditions.”

According to Spot On Chain, in the last two days, Celsius made another deposit of 67,500 ETH to Coinbase Prime, equivalent to ~$156.5 million. Since November 13, 2023, the platform has transferred a total of 847,626 ETH (~$1.9 billion) to the exchange.

In the last 2 days, #Celsius further deposited 67,500 $ETH ($156.5M) to #Coinbase Prime.

Overall, Celsius has moved 847,626 $ETH (~$1.90B) to CEX since Nov 13, 2023. Some of these $ETH might have been absorbed by whales via an OTC deal.

Just now, Celsius announced that the… https://t.co/LmwHCJYJis pic.twitter.com/s94laTdbZp

— Spot On Chain (@spotonchain) February 1, 2024

The transition phase involves a gradual winding down of operations with the closure of mobile and web applications.

In November, Celsius presented a revised restructuring plan, which involves a transformation into a cryptocurrency mining business. This proposal marked a shift from an earlier plan that also included a staking program.

In January, Celsius demanded that major creditors ($100,000 and above) return 27.5% of the amounts withdrawn three months prior to the bankruptcy filing.

Back in September 2022, the head of the platform, Alex Mashinsky, resigned as CEO. In early 2023, the New York Attorney General accused him of defrauding investors “out of billions of dollars.”

On July 13, the US Department of Justice filed seven criminal charges against the former head of Celsius. These include securities fraud, manipulation of the CEL token price, and misleading investors.

Later, the US Federal Trade Commission announced a settlement of claims against the company. The agreement involves the platform paying $4.7 billion.