The now-defunct crypto lending platform Celsius Network has declared that it has “emerged” from bankruptcy by finalizing the obligated payments under its confirmed plan of reorganization.
The 18-month-long process began after the platform filed for bankruptcy in July 2022.
Celsius Network to Begin Creditor Distribution
A recent statement outlined the distribution of over $3 billion to creditors of the crypto lending platform. Additionally, the announcement included the launch of a new company, in which creditors of Celsius will hold partial ownership.
“The Plan includes the distribution of over $3 billion of cryptocurrency and fiat to Celsius’ creditors, and the creation of a new Bitcoin mining company—Ionic Digital, Inc.—which will be owned by Celsius’ creditors and will have its mining operations managed by Hut 8 Corp.”
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It noted that revenue from the Bitcoin mining company will be used to repay back any remaining payments to creditors.
In its initial bankruptcy filing, Celsius owed more than $4.7 billion to more than 100,000 creditors.
“Ionic Digital was created as a new Bitcoin mining company that will continue to deliver recoveries to creditors. The Ionic Digital stock is expected to be publicly traded once the requisite approvals are received.”
Speculation over Potential Second Distribution
This meets the expected deadline that was set, requiring all Celsius account holders with over $100,000 in liabilities to settle by January 31.
At the time of publication, the price of Celsius Network’s token, CEL, stands at just $0.17.
However, a January 31 court filing states that PayPal and crypto exchange Coinbase will be the crypto distribution agents for the creditors. Meanwhile, cash distributions will be made by Stretto.
During a Spaces event on X, crypto influencers Tiffany Fong and Louis Origny engaged in a debate regarding the possibility of a second distribution.
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Origny holds the belief that a second distribution is unlikely. However, he emphasizes Celsius’ claims against Alameda Research and Three Arrows Capital (3AC) as potential sources for additional distributions.
However, Origny highlights a $800 million discrepancy. This follows an additional $700 million in liabilities, and he argues there are no supporting footnotes or clarification on the origin of this amount.
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Source: https://beincrypto.com/celsius-network-bankruptcy-creditors/