Celsius Network has successfully emerged from bankruptcy and has laid out a plan to reimburse its creditors with a total sum exceeding $3 billion, consisting of both cryptocurrency and fiat currency.
As part of this bankruptcy resolution, a new Bitcoin mining entity by the name of “Ionic Digital” will be established, and it will be entirely owned by Celsius’ creditors. The mining operations for Ionic Digital will be overseen by Hut 8 Corp., a company listed on Nasdaq under the ticker TSX. Matt Prusak, who serves as the Chief Commercial Officer at Hut 8, will assume the role of CEO at Ionic Digital.
Working closely with the board of directors, Prusak will lead the operations of Ionic Digital. Remarkably, this bankruptcy plan garnered overwhelming support, as 98% of Celsius Network’s account holders approved it.
In a statement, Chris Ferraro, the plan administrator and former Chief Restructuring Officer, Interim CEO, and CFO, expressed, “Today, more than 18 months after Celsius paused withdrawals, we have commenced the distribution of over $3 billion, encompassing cryptocurrency, fiat currency, and stock in Ionic Digital to the creditors of Celsius.”
Former CEO Released on $40M Bond
In the previous year, a U.S. District Judge established a bail amount of $40 million for the former CEO of Celsius Network, Alex Mashinsky. During that time, Mashinsky had entered a plea of not guilty in response to allegations of fraud. These charges revolved around accusations that he had artificially inflated the value of CEL tokens and had misled customers.
Additionally, Roni Cohen-Pavon, the Chief Revenue Officer of Celsius, was also implicated in the manipulation of CEL token prices.
In January, Mashinsky instructed his legal team to file a request for the dismissal of charges related to commodities fraud and market manipulation. In his filing with the court on January 12th, the CEO cited several reasons for this request. He argued that the commodities fraud charges were “repugnant” and conflicted with the ambiguous stance the U.S. government has taken concerning the classification of crypto assets as either securities or commodities.
Celsius Wallet Activity Increases
The analytics teams have observed a notable increase in activity associated with Celsius wallets.
In the month of January, Lookonchain, a blockchain platform specializing in on-chain analytics, detected a Celsius wallet engaged in transfers to various cryptocurrency exchanges. On X (formerly Twitter), Lookonchain shared this information, emphasizing that a wallet linked to the now-defunct crypto lending protocol had transferred 13,000 Ether tokens, equivalent to approximately $30.34 million in fiat currency, to the Coinbase trading platform.
According to Spot on Chain, the situation evolved further as they reported, “Over the past two days, #Celsius has additionally deposited 67,500 $ETH ($156.5M) into #Coinbase Prime. In total, since November 13, 2023, Celsius has moved a staggering 847,626 $ETH, approximately equivalent to $1.90 billion, to centralized exchanges. It’s worth noting that a portion of these $ETH may have been absorbed by larger cryptocurrency holders through over-the-counter (OTC) transactions. Additionally, Celsius recently announced the commencement of distributing over $3 billion in cryptocurrency and fiat to its creditors.”