After declaring it's bankruptcy on 2022 like other lender companies, Celsius is closing now in 2024, and is paying its creditors $3B through PayPal and Coinbase.
2022 Bankruptcy filing
On 2022, the major lender company filed is bankruptcy, the same as several other companies on the same niche, after the expansion of the cryptocurrency market during the pandemic on 2020.
During the filing it was estimated that the companies liabilities were between $1 Billion and $10 Billion, as reported on Reuters after the fact, and more than 100.000 creditors. Their cash on hand was far from covering the paybacks, they went to bankruptcy. Then en July all the funds were frozen.
Image by Freepik
Emerging From Bankruptcy
As part of the plan to recover its functions, the company decided to make a shift on its operations and now operate as a creditors-owned Bitcoin mining company. This plan frees up $250 Million in assets that will be used to pay costumers, which will also receive equity from the mining operation, being this change the way to recover the company, pay creditors, and continue with a new model.
They got the approval for this on November 2023 and expected to emerge from bankruptcy in early 2024, which has been achieved.
After being considered a total lost by the public, the company is now distributing $3Billion to its creditors and giving them shares on the business as stipulated last year.
Image by fabrikasimf on Freepik
Compensation to contributors
The compensation will be made via PayPal and Coinbase, no payments will be made through the debtors’ mobile or web applications, which will be shut down by the end of February. There is $3Billion on cryptocurrency and fiat to be distributed the following month.
The shared the creditors will receive are from the newly formed company Ionic Digital which will be the one operating on the mining business and will continue to pay the investors. Keep in mind $3Billion are being distributed but the value was originally calculated between 1 and 10, so they might still be $7 Billion bellow the total.
Celsius Network
Since a lot of the companies never came back from the same situation, this is a positive resolution. The market was shaken in a bad way back when Terra - Luna went to zero, and the trust has been complicated to rebuilt. A whole crypto company getting back on its feet is a sign of what the market is headed to. It is not disappearing any time soon.
Hope you liked it, until the next time
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