Celsius Payout Plan: Firm to Pay $3 Billion After Chapter 11 Bankruptcy

Crypto News – Last Wednesday, Celsius Network made a statement regarding bankruptcy and repayment to creditors. According to the statement, they will pay creditors $3 billion worth of fiat and crypto payments 18 months after users’ withdrawals were halted. In the meantime, the company hopes to resolve its Chapter 11 bankruptcy formally.

Celsius Payout Plan: Firm to Pay $3 Billion After Chapter 11 Bankruptcy

According to Celsius’ announcement on Wednesday, a part of the $3 billion would be used to launch Ionic Digital, a new bitcoin mining business owned by creditors, as part of the company’s authorized reorganization plan. Common shares, which are anticipated to be publicly traded if the firm obtains the required permissions, will be owned by Celsius creditors and form the basis of the mining company.

Under a four-year management arrangement, Ionic’s mining operations will be managed by Miami-based Hut 8. Celsius intends to shut down its web and mobile applications as part of the transition in order to begin the process of phased-out operations.

Mashinsky is Accused of Fraud

As the cryptocurrency lender noticed a $1.2 billion hole in its balance sheet, Celsius filed for bankruptcy on July 13, 2022. Authorities from the Securities and Exchange Commission, the Federal Trade Commission, and the Commodity Futures Trading Commission sued Celsius and its founder and former CEO, Alex Mashinsky, last year for allegedly deceiving clients. Fraud charges were brought against Mashinsky. In September, his trial is expected to begin.