Celsius, the bankrupt crypto lender, has reached a settlement agreement with its creditors and Series B holders. The agreement entails distributing $25 million from the proceeds of the sale of GK8, the self-custody platform, to shareholders. However, the settlement has been met with objections from some parties, highlighting the complexities of the bankruptcy proceedings.
Sale of GK8 and Settlement Allocation:
As part of Celsius’ bankruptcy proceedings, the self-custody platform GK8 was sold to Galaxy Digital. While the sale details remain undisclosed, it was confirmed that the price was significantly lower than the $115 million initially paid by Celsius. From the sale proceeds, $25 million will be distributed to shareholders, with $24 million designated for legal expenses and $1 million to be divided among the group.
Series B Shareholder Disputes:
Challenges emerged among the Series B shareholders regarding the settlement. One group argued that the allocated $24 million did not cover their complete legal expenses, while another group considered the $1 million distribution unfair. However, the largest group of Series B shareholders filed a motion to share $1 million equally with all preferred shareholders, urging the court to approve the settlement and proceed with the bankruptcy process, which would include retail users.
Ongoing Legal Proceedings:
Celsius and its creditors are scheduled to appear in court in New York on July 18 to address the settlement and other matters related to the bankruptcy proceedings. The company’s former CEO, Alex Mashinsky, was recently arrested following an investigation into Celsius’ collapse. Additionally, Celsius faces legal action from regulatory bodies such as the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Federal Trade Commission (FTC).
Celsius’ agreement to distribute $25 million among shareholders signifies progress in the bankruptcy proceedings. However, objections from certain Series B shareholders highlight the challenges faced by the lender. The court hearing on July 18 will play a crucial role in determining the course of action. As the legal battles continue and regulatory authorities pursue action against Celsius, the fate of the bankrupt lender and the involvement of its retail users remain uncertain.
