After a year and a half of pausing withdrawals and filing for Chapter 11 bankruptcy protection, Celsius Network will commence a $3 billion payout to creditors starting today (02/01).
PayPal, Venmo, and Coinbase are debt distribution agents on behalf of Celsius. Additionally, Celsius will gradually wind down its operations, beginning with the suspension of the mobile app and website on February 28.
In addition to cash, creditors will receive stakes in the newly established mining company, Ionic Digital. 98% of Celsius Network’s creditors have agreed to sign onto this plan after 18 months in bankruptcy court.
Ionic is also considering a future stock listing. Matt Prusak, Chief Commercial Officer of Hut 8, has been appointed as CEO of Ionic.
Celsius declared bankruptcy on July 13, 2022, with a shortfall of $1.2 billion in the balance sheet. A year later, the lending platform, co-founded by former CEO Alex Mashinsky, faced simultaneous lawsuits from the U.S. Securities and Exchange Commission (SEC), the Federal Trade Commission (FTC), and the Commodity Futures Trading Commission (CFTC). To date, Celsius has reached an agreement with the FTC, agreeing to pay a $4.7 billion fine upon completing the bankruptcy proceedings.
Related: Celsius Transferred 125 Million USD ETH to the Exchange
As for Mashinsky, he was arrested in July 2023, facing charges of defrauding customers and manipulating the platform’s token prices. Mashinsky is currently under house arrest with a $40 million bond, and the court has ordered the freezing of his bank assets and real estate. The next trial is scheduled for September 2024.
