Apart from the cash, creditors will get a stake in the newly formed Ionic Digital Inc. mining operation, the company said in a statement on Wednesday. About 98% of Celsius Network’s creditors signed off on the plan after 18 months in bankruptcy court. Ionic is expected to become a publicly traded company once it clears approvals.

“When we were appointed in June 2022, everyone assumed Celsius would disappear completely like the other crypto lenders that were filing bankruptcy around the same time,” said David Barse and Alan Carr, members of the special board committee that steered the bankruptcy, in a statement.

They said they managed to secure the platform’s cryptocurrency, negotiate a deal with creditors, reorganize the part of the company that could continue and settled cases with the U.S. Department of Justice, Securities and Exchange Commission and Commodity Futures Trading Commission.

Matt Prusak, the chief commercial officer of Hut 8, the company managing Ionic’s mining, has been named Ionic’s CEO.

In a separate filing, the firm said PayPal and Coinbase will distribute the cryptocurrencies. Celsius will make no distributions through the debtors’ mobile or web applications, which will be shut down on or around Feb. 28.

Crypto lender Celsius’s bankruptcy process also saw it make a $4.7 billion settlement with U.S. authorities over fraud allegations. Former CEO Alex Mashinsky – who had resigned in September, 2022 – was arrested on fraud charges for allegedly manipulating the price of the lender's CEL token, an allegation he has denied.

Mashinsky was released on a $40 million bond, and a court ordered his banking and real estate assets frozen. His trial is scheduled for September 2024.

Celsius Bankruptcy

Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.