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Celsius Initiates $3B Repayment to Creditors Within the Bankruptcy Recovery

Celsius overcomes bankruptcy challenges

The crypto lender Celsius has officially exited the Chapter 11 bankruptcy. The firm’s resurgence comes over 18 months following its operational collapse in 2022. This exit not only marks a turning point for Celsius but also sets the stage for a substantial financial restitution to its creditors. The company announced its plans to initiate the distribution of over $3 billion in crypto and fiat assets to its creditors, demonstrating its commitment to financial recovery and stability in the volatile crypto market.

Celsius (@CelsiusNetwork):

“Celsius has now begun to distribute over $3 billion in cryptocurrency and fiat to creditors, settle claims with key stakeholder groups, and consummate the previously announced MiningCo transaction, resulting in a new Bitcoin mining company that will be called Ionic Digital, Inc.,…”

The emergence of Ionic Digital and creditor repayments

In the wake of its bankruptcy exit, Celsius has announced the formation of Ionic Digital, a Bitcoin mining company. This new venture, managed by Hut 8 and spearheaded by Hut 8's chief commercial officer Matt Prusak, signifies a strategic pivot for the crypto lender. According to a January 31st press release, Ionic Digital aims to further contribute to creditor recoveries, with its stock expected to be publicly traded upon receiving necessary approvals.

This move is a part of the company's broader strategy to settle claims with key stakeholders and bring the previously announced MiningCo transaction to fruition, thereby marking the birth of Ionic Digital, Inc. 

As Celsius transitions into a new phase, it has enhanced its financial strategy. Notably, the company has increased the crypto assets available for creditor distribution by approximately $250 million. This increase was achieved through the conversion of altcoins to BTC or ETH and settlements from previous legal proceedings.

The company's proactive approach to restructuring is reflected in its decision to wind down operations and discontinue its mobile and web applications by February 28. This strategic move includes facilitating creditor distributions through platforms like PayPal, Venmo, and Coinbase, as highlighted in a recent social media post by Simon Dixon.

 Simon Dixon (@SimonDixonTwitt):

#Celsius Creditors - 57.9% liquid crypto distribution

Login to your #PayPal account https://t.co/2veOA6Xp8S pic.twitter.com/zDKZvXTJai

David Barse and Alan Carr, members of the special board that guided Celsius through bankruptcy, expressed pride in the company's resilience: 

"Our exit from bankruptcy is the culmination of an extraordinary team effort." 

This sentiment underscores the company's determination to navigate its challenges and emerge stronger.