- Celsius Network has exited bankruptcy with overwhelming support from customers and creditors to proceed with the restructuring plan that includes focusing on Bitcoin mining.
- Celsius is following FTX’s footsteps of intending to repay genuine creditors and customers fully after years of legal proceedings.
After more than 18 months of legal battles through Chapter 11 bankruptcy protection, distressed crypto lending company Celsius Network has announced the official exit of the bankruptcy proceedings. According to the announcement, Celsius has commenced the distribution of $3 billion in liquid crypto assets and fiat currencies to the affected customers and creditors.
Notably, the Celsius bid to exit the bankruptcy proceeding was approved overwhelmingly by about 98 percent of the company’s account holders, which was also affirmed by the presiding bankruptcy court. Meanwhile, Celsius Network is preparing to transition to a Bitcoin mining publicly traded company dubbed Ionic Digital, Inc, and managed by Hut 8 Corp. (NASDAQ: HUT).
Moreover, the restricting plan was also approved by the United States Securities and Exchange Commission (SEC) in close coordination with the official committee of the Unsecured Creditors (UCC). Worth noting that the Celsius Network reduced its altcoin holdings by nearly $250 million and successfully converted the funds to either Bitcoin or Ethereum.
Meanwhile, the Ionic Digital stock is set to begin trading as soon as the requisite approvals are released. Under the leadership of CEO Matt Prusak, Ionic Digital will pursue to compete for the Bitcoin rewards, which is set to increase difficulty following the upcoming halving.
“Creating the best outcome for creditors by maximizing value and speed has been front of mind for Celsius throughout this process,” said Chris Ferraro, Plan Administrator and former Chief Restructuring Officer, Interim Chief Executive Officer, and Chief Financial Officer.
Today, over 18 months after Celsius paused withdrawals, we began distributing over $3 billion of cryptocurrency, fiat, and stock in Ionic Digital to Celsius creditors.
Celsius Exit from Bankruptcy Signals Bullish Outlook
The finalization of the Celsius bankruptcy proceedings has coincided with the announcement from FTX that it expects to fully repay its customers soon. The announcements have coincided with heightened Bitcoin volatility, which closed January on an indecisive note as buyers attempted to push the instrument toward $50k in vain. Nevertheless, the closure of the Celsius bankruptcy proceedings has marked the beginning of a new era that is characterized by high regulation and institutional-led adoption of web3 and digital assets.
According to David Barse and Alan Carr, members of the Special Committee of the Board of Celsius Network, the company has already settled with the DOJ, CFTC, and the SEC, besides the unanimous plan to restructure the company to a Bitcoin mining firm.
Market Outlook
The Ionic Digital platform joins a highly competitive Bitcoin mining industry that has seen its hash rate rally exponentially to its all-time high of around 486 Exahashes/s. Nevertheless, the company is set to reduce its risks significantly from the previous lending business.
Furthermore, Bitcoin price is already in a macro bullish outlook fueled by the heightened demand from institutional investors and the upcoming halving event. Meanwhile, Bitcoin price has gained about 5 percent in the past five days to trade for $42,972.
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