Celsius Network, a troubled crypto lending platform, has completed the distribution of over $3 billion in assets to its creditors after an 18-month bankruptcy journey. The restructuring process involved collaboration with regulatory bodies and innovative strategies, including alternative settlement agreements and converting less liquid altcoins into major cryptocurrencies like Bitcoin and Ethereum.
The majority of account holders owed funds have given their approval
Celsius achieved a significant milestone by garnering nearly unanimous support, with 98% approval from owed-funds account holders, for its distribution plan. This plan, meticulously crafted, facilitated the transfer of over $3 billion in a mix of cryptocurrencies and fiat currencies to creditors, providing some relief after a prolonged and uncertain period. From this process, a new entity named Ionic Digital emerged, focused on Bitcoin mining, with ownership distributed among creditors and operational management overseen by Canadian company Hut 8. To expedite distribution, Celsius recently liquidated a substantial portion of its Ethereum holdings, depositing approximately 67,500 ETH tokens, equivalent to $157 million, with Coinbase’s institutional trading division, as per data from blockchain analytics firm Spot on Chain.
According to evidence from Lookonchain, an on-chain tracking platform, Celsius recently moved 18,000 ETH tokens from their reserves to Coinbase. Given the current ETH price trend, this transaction equated to approximately $40 million worth of the cryptocurrency.
In aggregate, financially troubled Celsius transferred more than 847,600 ETH, with a value of almost $2 billion, from diverse digital wallets to centralized trading platforms like Coinbase. This strategic decision to liquidate substantial amounts of Ether and other cryptocurrencies directly on exchanges is aimed at streamlining the payout process for creditors seeking prompt fund recovery.
Celsius collaborated closely with federal and state regulatory bodies to ensure that the distributions complied fully with standards. With the completion of distributions and the commencement of winding down operations, Celsius can finally bring its tumultuous multi-year saga to a close.
The company prioritized the best interests of creditors.
Chris Ferraro, Celsius’ Plan Administrator and former Chief Restructuring Officer, remarked that the company has prioritized the creditors’ best interests by emphasizing value maximization and speed throughout the process.
In the future, the formerly controversial Celsius mobile app and website, crucial to its distinct business model, will be permanently closed. Although creditors may not recover the full amounts owed, the meticulous management of the bankruptcy process has left most satisfied—an important achievement considering the challenging circumstances when withdrawals were suddenly halted in June 2022.
Equipped with valuable insights, the cryptocurrency industry can now shift its focus towards rebuilding trust among stakeholders and cultivating a stronger ecosystem.
