In a significant development, Celsius, the crypto lender facing bankruptcy, has successfully reached a settlement agreement with its creditors and Series B holders. The resolution comes as a sigh of relief for the struggling firm, as it paves the way for resolving its financial woes.
As part of the settlement, a substantial sum of $25 million will be distributed to the shareholders, offering some respite amidst the challenges faced by Celsius. Out of this amount, $24 million has been earmarked to cover legal expenses, while the remaining $1 million will be divided among the concerned parties.
The resolution was achieved through the proceeds generated from the sale of GK8, the self-custody platform, to Galaxy Digital. Although specific details of the sale were not disclosed, it was previously mentioned that the sale price was significantly lower than the original purchase price of $115 million paid by Celsius.
Notably, Celsius successfully completed its Series B funding round in November 2021, raising a whopping $750 million, surpassing its initial target of $400 million. The funding round was led by growth equity firm Westcap and one of Quebec’s pension funds, demonstrating continued interest and confidence in the crypto lending sector.
However, during the bankruptcy proceedings, some Series B shareholders expressed concerns about the allocated $24 million not fully covering their legal expenses. On the other hand, another group criticized the distribution of $1 million as an unfair benefit for a specific subset.
In response to the concerns raised, the majority of Series B shareholders expressed their intention to distribute the $1 million from the settlement equitably among all preferred shareholders. Furthermore, they requested the court’s approval for the settlement, ensuring the continuation of the remaining bankruptcy proceedings, including matters concerning retail users.
Earlier this month, Celsius received approval from a US court to liquidate approximately $25 million worth of various altcoins, marking another step forward in the bankruptcy resolution process. The altcoins sold off by Celsius Network included prominent cryptocurrencies such as Chainlink (LINK), BNB coin, Synthetix Network (SNX), 1INCH, 0x Protocol (ZRK), and Shiba INU’s BONE, among others.
This settlement agreement and the liquidation of altcoins signal a pivotal moment for Celsius, as it navigates through its financial challenges and seeks to stabilize its operations. The distribution of funds to shareholders and the resolution of legal matters are crucial steps toward the recovery and future prospects of the crypto lender.
While uncertainties remain, the successful settlement agreement brings hope to stakeholders, providing a glimmer of optimism in an otherwise tumultuous period for Celsius and the broader crypto lending industry.
Coinbold will continue to monitor developments in this story as it unfolds and bring you the latest updates on Celsius’ journey towards financial stability.