After halting withdrawals and collapsing in 2022, Celsius, the cryptocurrency lending platform, successfully emerged from Chapter 11 bankruptcy and is actively working to return over $3 billion to its creditors.
As part of its bankruptcy exit plan, Celsius created Ionic Digital, a Bitcoin mining company managed by Hut 8, aiming to generate additional recoveries for creditors. Matt Prusak, a commercial officer at Hut 8, will lead the new company, which will become publicly traded after obtaining the required approvals.
Around 98% of Celsius’s creditors have approved the bankruptcy exit plan. The company filed for bankruptcy protection after halting withdrawals in June 2022. Celsius converted altcoins to Bitcoin (BTC) or Ether (ETH) to increase the amount of crypto available for creditors by approximately $250 million, resolving previous disputes.
In a legal filing, Celsius announced its intention to cease operations and shut down mobile and web applications by February 28. Creditors will receive distributions through platforms like PayPal, Venmo, and Coinbase. Some creditors have already shared details about the claims form on X.
“Everyone assumed Celsius would disappear completely like the other crypto lenders that were filing bankruptcy around the same time,” said David Barse and Alan Carr — members of a special board that steered Celsius through bankruptcy. “Our exit from bankruptcy is the culmination of an extraordinary team effort.”
Celsius attributed the suspension of withdrawals to the declining price of its native token, CEL.
During its bankruptcy proceedings, Celsius resolved fines totaling $4.7 billion with the U.S. Federal Trade Commission. Settlements were also reached with the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.
Former Celsius CEO Alex Mashinsky, charged with financial fraud, manipulating CEL’s price, and misleading Celsius customers, has pleaded not guilty. He is out on a $40 million bond and is scheduled to appear in court in September.
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