Bankrupt Celsius Network to Unstake Ethereum worth $227 Million and Distribute Assets to Creditors
In Brief
Celsius Network will unstake its existing Ethereum holdings valued at $227 million, to facilitate asset distribution to its creditors.
Cryptocurrency lender Celsius Network — currently undergoing bankruptcy proceedings, announced its intention to unstake its existing holdings of Ethereum to facilitate asset distribution to its creditors. The unstaking event is scheduled to take place within the next few days.
Eligible creditors will receive distributions of Bitcoin (BTC) and Ethereum (ETH) as outlined in the approved plan.
Currently, Celsius possesses Ethereum holdings valued at around $227 million. The staked Ethereum holdings have served as an income stream for the defunct company, aiding in offsetting costs obtained during its restructuring process.
According to data from Nansen, Celsius has a total of 206,300 ETH awaiting withdrawal, constituting 32% of all ETH in the current withdrawal queue. Presently, Celsius has successfully withdrawn 40,249 ETH.
Celsius filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York in July 2022. This decision followed the challenges posed by the volatile cryptocurrency market, leading the lender to freeze withdrawals amidst a liquidity crisis.
Celsius Network Advances Reorganization Plans
In accordance with the approved settlement plan, Celsius has enabled qualified users to withdraw 72.5% of their cryptocurrency until Feb. 28. As per a court filing from last September, around 58,300 users held $210 million categorized by the court as “custody assets.”
Recently, Celsius Network obtained approval from US bankruptcy judge Martin Glenn for its proposal to transition into Bitcoin mining. The company was granted permission to deviate from the initially approved bankruptcy plan, citing the new reorganization as an indicator that the conditions for creditors and clients have not deteriorated.
Celsius announced plans to establish a new publicly traded Bitcoin mining company, intending to provide Celsius Network customers with equity in the firm. Additionally, there are initiatives to enhance the distribution of liquid cryptocurrency to account holders. The company anticipates emerging from bankruptcy in early 2024.
Commencing the asset distribution process to eligible creditors, Celsius Network progresses further in its efforts towards a successful reorganization and potential emergence from bankruptcy this year.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
