Celsius Successfully Emerges from Chapter 11, Providing Creditors with a $3 Billion Payout

Celsius, the well-known crypto lending company, is thrilled to announce its successful emergence from Chapter 11 bankruptcy. The company has now begun the process of distributing $3 billion in cryptocurrency and fiat to its creditors.

This distribution comes as part of the company’s confirmed plan of reorganization, which was approved by an overwhelming majority of approximately 98% of the company’s account holders. The plan was also confirmed by the Bankruptcy Court for the Southern District of New York on November 9, 2023.
As part of the reorganization plan, Celsius will establish a new Bitcoin mining company called Ionic Digital Inc. This mining firm will be owned by the company’s creditors, serving as a way to address financial obligations to those who suffered from its closure years ago. Creditors will receive equity in the form of common stock. Hut 8 Corp will be responsible for managing the mining operations.
In addition to the establishment of Ionic Digital, the reorganization plan also includes the distribution of over $3 billion in cryptocurrency and fiat to Celsius’ creditors. It should be noted that these distributions will not be made through the Debtors’ mobile or web applications, as these platforms will be shut down in the near future.
Access to the Celsius Apps and the records contained within them will no longer be available to creditors starting from February 28, 2024. Instead, distributions for all claims will be made exclusively through PayPal and Coinbase.
The funds available for creditor distribution have been bolstered by converting altcoins to Bitcoin and Ethereum, as well as gains from previous settlements, resulting in an additional $250 million.
Following the confirmation of the plan by regulatory bodies, Celsius has announced its transition to the “MiningCo Transaction.” Matt Prusak, Chief Commercial Officer of Hut 8, has been appointed as the CEO of Ionic Digital and will work alongside the previously announced Board of Directors.
Chris Ferraro, speaking on behalf of Celsius, expressed the company’s commitment to maximizing value and speed in order to provide the best outcome for creditors. He stated, “Today, over 18 months after Celsius paused withdrawals, we began distributing over $3 billion of cryptocurrency, fiat, and stock in Ionic Digital to Celsius creditors.”
David Barse and Alan Carr, members of the Special Committee of the Board of Celsius, emphasized the collaborative efforts that led to the company’s successful exit from bankruptcy. They stated, “When we were appointed in June 2022, everyone assumed Celsius would disappear completely like the other crypto lenders that were filing bankruptcy around the same time. We, however, believed that Celsius could navigate complicated legal, regulatory, and business issues.”
The arduous 18-month journey resulted in a favorable outcome for customers and claim holders, with enhanced recovery. Celsius emerged from bankruptcy, reached a settlement with preferred shareholders, successfully auctioned the reorganizable plan to establish a new Bitcoin mining company, and resolved matters with the DOJ, SEC, and CFTC.
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