Celsius’ $3 Billion Payout Plan Unveiled
Bankrupt cryptocurrency lender Celsius has officially initiated its plan to distribute over $3 billion in liquid cryptocurrency and fiat to creditors. This move is part of the company’s broader strategy to reorganize and address the fallout from its collapse in June 2022.
Celsius’ bold move of initiating a $3 billion payout and introducing Ionic Digital signifies a significant step in reshaping its financial landscape. The groundbreaking Bitcoin mining venture aims to settle creditors and marks a strategic pivot towards sustainable recovery. As the crypto market adapts to the aftermath of the lender’s bankruptcy, this innovative approach by Celsius is poised to contribute to a new era of stability and growth within the cryptocurrency sector.
Creation of Ionic Digital, Inc.
As a pivotal component of the reorganization plan, Celsius has introduced Ionic Digital, Inc., a new Bitcoin mining company. This innovative venture aims to ensure ongoing recoveries for Celsius’ creditors while introducing a fresh perspective to the cryptocurrency mining sector. Hut 8 Corp will manage the mining operations.
Celsius’ Journey from Collapse to Reorganization
The bankruptcy of Celsius, triggered by the crypto market downturn and mass withdrawals in June 2022, marked one of the largest collapses in the cryptocurrency realm. With an estimated $1.2 billion hole in its balance sheet and $4.7 billion in liabilities, Celsius filed for bankruptcy in July.
Founder Faces Fraud Charges
Founder Alex Mashinsky, while not admitting guilt, has faced fraud charges in connection with Celsius’ collapse. The legal developments have added complexity to the ongoing narrative surrounding Celsius’ reorganization and payout plan.
Court Approval and Celsius’ New Beginning
In late 2023, the Bankruptcy Court in New York approved Celsius Network’s reorganization plan. This plan involves the establishment of a new company focused solely on cryptocurrency mining and staking to settle Celsius’ debts. The new entity, under the control of Celsius’ creditors, signals a fresh start for the embattled crypto lender.
