A new beginning awaits stablecoin issuer Celsius Network LLC as it officially exits bankruptcy, marking the culmination of an intense restructuring process. The crypto firm, which concluded its financial reorganization on January 31, 2024, disclosed this information in a press release. The achievement follows the implementation of the confirmed plan of reorganization [“Plan”], a strategy that garnered approval from an overwhelming 98% of the firm’s account holders. The Bankruptcy Court for the Southern District of New York, known as the “Bankruptcy Court,” officially confirmed the plan on November 9, 2023.
Our exit from bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and our creditors.
Celsius Network portrayed this milestone as the culmination of a grueling eighteen-month journey. The crypto firm emphasized its success in building consensus among diverse stakeholders, resolving intricate legal matters, cooperating fully with regulatory investigations, and executing the transactions outlined in the plan.
The reorganization plan encompasses the distribution of over $3 billion in cryptocurrency and fiat to Celsius’ creditors. Additionally, a new Bitcoin mining entity, Ionic Digital, Inc., has been established as part of the restructuring. This new venture will be owned by Celsius’ creditors and will have its mining operations managed by Hut 8 Corp.
Celsius: Overcoming Regulator Roadblocks
The crypto lender faced considerable challenges post-bankruptcy as it fought to salvage its bitcoin mining and crypto lending operations. A crucial turning point came in December 2023, when a U.S. court approved the crypto firm to establish the aforementioned Bitcoin mining company, a move sanctioned by U.S. bankruptcy judge Martin Glenn. This decision allowed the debtors to initiate liquid cryptocurrency distributions on the effective date.
At that time, the Official Committee of Unsecured Creditors representing Celsius Networks expressed confidence in the bankruptcy process’s trajectory, affirming, “We believe the debtors remain on track for the effective date to occur at the end of January.”
Celsius overcame obstacles from creditors and regulators before the December ruling paved the way for the crypto lending platform’s emergence from bankruptcy in early 2024. As per the latest P.R., the firm will now pursue an orderly wind-down [OWD] of its operations, including discontinuing the Celsius mobile and web applications.