HomeCryptoCrypto news: Celsius emerges from bankruptcy and begins to pay its creditors

Crypto news: Celsius emerges from bankruptcy and begins to pay its creditors

Celsius, a well-known crypto lending company that went bankrupt in July 2022, is about to solve all its problems by closing its liabilities and compensating its users who, 18 months ago, found themselves unable to withdraw their cryptocurrencies from the platform.

98% of Celsius creditors have approved the fund recovery plan after several meetings with the bankruptcy court, which includes a cash refund and a participation in a mining company.

Now the cryptographic project could reopen its activity, returning to operate normally in the cryptocurrency market. At the same time, however, its utility token CEL has sunk into the abyss, unable to recover after the past crash.

Let’s see all the details below.

Celsius: the crypto lender is saved from bankruptcy and redistributes the money to its creditors after 18 months of blocked withdrawals

The crypto lending company Celsius stated today in a post on X that it has successfully emerged from the bankruptcy situation that has been ongoing since July 2022.

The process of company restructuring has finally been concluded with the “Fahrenheit LLC” consortium, which has invested several million dollars after receiving approval from the Delaware bankruptcy court to compensate investors affected by the crisis.

Now Celsius is about to return about 3 billion dollars to its creditors, most of whom are retail users who found themselves unable to withdraw funds from the platform in the summer of 2022.

The repayment plan for creditors, approved by 98% of them, includes a payment in crypto and the acquisition of stakes in the new company “Ionic Digital Inc.” which deals with Bitcoin mining.

The representatives of Celsius have also predicted that Ionic will soon be listed on the stock exchange, in order to ensure that interested parties can easily liquidate their own shares.

It is also worth noting that Matt Prusak, Chief Commercial Officer of Hut 8, the company that manages Ionic’s mining activity, has been appointed as CEO of the latter.

In addition to the reimbursement issue, the company’s restructuring team has managed to resolve disputes with the United States Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.

It is still unclear what the proportions of the reimbursement between cash and stock will be: all we know is that recently Celsius has converted its altcoins into BTC or ETH “through previous agreements”, thus increasing its liquid availability in crypto by 250 million.

In a statement in court, the bankrupt company declared that it will close its operations and discontinue its mobile and web applications by February 28th, with creditor distributions being made through PayPal, Venmo, and Coinbase, which some creditors have submitted to X by showing a compensation request form.

 David Barse and Alan Carr, members of the special committee of the council that led the failure, were surprised by the milestone achieved in avoiding Celsius’ bankruptcy, which seemed almost certain at the time of the disaster.

These are their words:

When we were appointed in June 2022, everyone assumed that Celsius would disappear completely, like the other credit institutions that were declaring bankruptcy at the same time”.

Now Celsius will be able to reorganize itself to reopen its doors in a different form, operating normally in the crypto market, as it did with prestige until a few years ago.

It will probably take some time before it returns to cover a prominent figure in the world of crypto lending, which in the last 2 years has evolved a lot, moving more towards the decentralized environments of DeFi.

Meanwhile, while Celsius is about to restart, its founder Alex Mashinsky doesn’t seem to be completely out of trouble.

After reaching a plea agreement of $4.7 billion with US authorities for fraud and market manipulation charges, and paying a $40 million bail, he will have to appear in court in September 2024 to complete his judicial process.

The negative performance of the CEL crypto

While the crypto lending platform Celsius is about to emerge from bankruptcy and prepares to return actively to the crypto market, its utility token CEL doesn’t seem to be doing well.

When in 2022 Celsius suspended withdrawals on its platform citing liquidity issues, CEL plummeted in its chart against the dollar, further complicating an already weak price action of the bear market of the same year.

Immediately after the withdrawal requests were blocked, the cryptocurrency was the subject of a series of market manipulation attempts (for which Mashinsky was accused) that, however, did not change its fate.

From the historical highs of 2021, CEL has lost about 98% of its value, now standing at a price of $0.17.

During 2023, while the rest of the crypto market experienced strong price increases, the Celsius token recorded a significant -70% as a sign that investors are no longer interested in this type of asset.

Ultimately, with a still unavailable platform, and with a completely ruined reputation behind it, there is no reason for anyone to believe in the future of CEL unless the cards are changed with the next reopening.

Unfortunately, however, even if this crypto were to be revalued by creating new connections with the lending protocol, it is unlikely that it will be able to return to the notoriety it had previously reached.

Currently, the selling pressure on the currency continues to be felt and prices are being pushed lower and lower, reaching a market capitalization of just 73 million dollars.

For CEL, 2024 is shaping up to be another extremely negative year.

Celsius crypto price chart
Celsius (CEL/USDC) weekly price chart
Alessandro Adami
Alessandro Adami
Graduated in "Information, Media and Advertising", for over 4 years interested in the cryptocurrency and blockchain space. Co-Founder of Tokenparty, community active in spreading crypto-enthusiasm. Co-founder of Legal Hackers Civitanova marche. Information technology consultant. Ethereum Fan Boy and supporter of Chainlink oracles, strongly believes that smart contracts will be central in the development of society.