Celsius Network, a cryptocurrency lending firm, has begun the process of distributing $3 billion in assets to its creditors following its Chapter 11 bankruptcy resolution. This move comes after an 18-month pause on user withdrawals, marking a significant step in the company’s restructuring efforts.
In the wake of the bankruptcy, a new Bitcoin mining company, Ionic Digital, is set to be established with a portion of the distributed funds. This initiative is part of Celsius Network’s approved restructuring plan, aiming to provide creditors with common shares of the new enterprise.
The Miami-based mining company Hut 8 will manage Ionic Digital’s operations for four years, as per a management agreement. This strategic partnership is expected to facilitate the successful launch and operation of the new mining company.
Celsius Network is also planning a complete shutdown of its mobile and web applications, indicating a full cessation of its current operations as it transitions to the new business structure.
The bankruptcy of Celsius Network in July 2022, which revealed a $1.2 billion deficit, had a significant impact on the crypto market. The aftermath saw the company’s founder, Alex Mashinsky, face lawsuits and fraud charges from various regulators, with a trial set for later in the year.