Bankrupt crypto platform Celsius began paying debts to creditors amounting to $3 billion in accordance with the approved reorganization plan.
Celsius' plan of reorganization was overwhelmingly approved by 98% of the company's account holders and was approved by the Bankruptcy Court for the Southern District of New York on November 9, 2023. Under the terms of this plan, Celsius must distribute $3 billion worth of cryptocurrency and fiat money to creditors.. At the same time, the company claims that it has increased the amount available to creditors by $250 million by converting altcoins into bitcoins and ethers.
The plan also calls for the creation of a new bitcoin mining company, Ionic Digital Inc., which will be owned by Celsius' creditors and continue to pay them back.. Its mining operations will be managed by Hut 8 Corp.. The new company will not be able to accept deposits or issue loans in cryptocurrency, as Celsius did. There is a possibility that Ionic Digital shares will also be publicly traded, subject to the necessary approvals..
Celsius began making payments 18 months after filing for bankruptcy. In June 2022, the crypto lender suspended the withdrawal of funds from client wallets amid the collapse of the crypto market. The US Department of Justice accused Celsius founder Alex Mashinsky of fraud and market manipulation, but he pleaded not guilty. In September, Mashinsky asked the court to dismiss charges of defrauding investors.
Recall that in January, Celsius lawyers urged clients who cashed out more than $100,000 90 days before the platform declared bankruptcy to send part of the withdrawn funds back.