Settling Scores: Celsius’ Chapter 11 Debt Resolution


After suspending withdrawals in June 2022, cryptocurrency exchange Celsius Network has emerged from Chapter 11 Bankruptcy, ushering in the commencement of distribution of over $3 billion in cryptocurrency and fiat currency to its creditors.[1] The good news follows after 18 months of the company’s roller-coaster Chapter 11 Bankruptcy case that presented fascinating complexities such as dollarization concerns, regulatory fines from agencies such as the SEC, and the steep decline in the value of Celsius’ CEL token.[2] The Bankruptcy also came when many other crypto platforms, such as BlockFi, found themselves entangled in Bankruptcy proceedings following the collapse of FTX in 2022.[3]

In 2023, the reorganization plan was presented to the Celsius’ account holders, with almost 98 percent voting in favor of the plan.[4] The Bankruptcy Court then confirmed the Southern District of New York plan on November 9, 2023.[5]

As part of the distributions, the Celsius plan features the creation of a new Bitcoin mining company, Ionic Digital Inc.[6] Many of Celsius’ creditors will also receive stock options in the new company.[7]

Ionic Digital is expected to be a publicly traded company once it receives the requisite approval.[8] Crypto mining company Hut 8 will oversee Ionic’s operations per a four-year management agreement.[9] Matt Prusak, Chief Commercial Officer of Hut 8, has been named CEO of Ionic Digital.[10] As part of the transition, Celsius will continue its orderly wind-down of operations, such as terminating its mobile and web applications.[11]

The creation of Ionic Digital showcases an optimistic new chapter for Celsius and its creditors and serves as a positive example for future crypto Chapter 11 cases. It also mirrors the broader trend in the crypto industry to diversify operations to adjust to the volatile nature of the crypto market.[12]

According to David Barse and Alan Carr, members of the special committee of Celsius’ Board, the company’s “exit from Bankruptcy is the culmination of an extraordinary team effort and extensive collaboration between Celsius, Hut 8, strategic partners, and [its]creditors.”[13]

The past 18 months were challenging for Celsius and its creditors. Still, with immense cooperation and transparency among legal counsel, creditors, and the Bankruptcy Courts, Celsius’ Chapter 11 saga is an example for future crypto Chapter 11 cases to emulate and learn from.

[1] See Unlocking Value: Celsius Returns Over $3 Billion to Creditors, DailyCoin (Feb. 14, 2024),

[2] See id.

[3] See Celsius Emerges from Chapter 11 and Commences Distributions of Over $3 Billion of Cryptocurrency to Creditors, Bus. Wire (Jan. 31, 2024, 6:18 PM),

[4] See id.

[5] See id.

[6] See Danny Park, Celsius Network starts $3 billion payout after emerging from Chapter 11 Bankruptcy, The Block (Jan. 31, 2024, 7:53 PM),

[7] Id.

[8] See id.

[9] See Matthew Fazelpoor, Celsius successfully exits Chapter 11 Bankruptcy, NJBIZ (Feb. 1, 2024),

[10] See id.

[11] See id.

[12] See Ben Glickman, Celsius Network to Distribute $3 Billion to Creditors After Exiting Bankruptcy, Wall St. J. (Jan. 31, 2024, 7:25 PM),

[13] See id.


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Fordham Journal of Corporate & Financial Law