Amidst the tumultuous bankruptcy proceedings of cryptocurrency lender Celsius, a settlement plan to distribute $25 million from the proceeds of a sale to shareholders has found agreement among the lender, its creditors, and Series B holders. The funds in question are generated from the sale of their self-custody platform GK8 to Galaxy Digital.
Despite a non-disclosure on the precise details of the sale, it’s understood that the price marked a significant departure from the initial buy price of $115 million in a disclosure by Michael Wursthorn, Galaxy’s spokesman. The proceedings form part of Celsius’ efforts to navigate the financial setbacks in the face of its ongoing bankruptcy, which followed a close on a heavy oversubscription of its series B round in November of 2021, overseen by outfits such as Growth equity firm Westcap and a pension fund based in Quebec.
Although there has been agreement on the million-dollar distribution among the group, there are shades of discontent among different strata of stakeholders. One faction of Series B shareholders bemoans the $24 million allocated, citing the the shortfall when compared to their legal expenses. On the other side of the spectrum, there is criticism facing the million-dollar distribution which is seen as an unjust bonus for a certain faction.
Notwithstanding these objections, the majority contingency among the Series B shareholders chalks out a plan to evenly distribute $1 million among all preferred shareholders. They further claim for the progression of the rest of the bankruptcy process, which takes into account retail users, to be approved by court, dismissing objections.
While this legal morass unfolds, former Celsius CEO, Alex Mashinsky, faces his own legal troubles as he was arrested in the preceding week following investigation into the company’s downfall. Furthermore, Celsius grapples with lawsuits from regulatory bodies such as U.S. Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and Commodity Futures Trading Commission (CFTC), positioning itself in a bundle of evolving financial regulations affecting the broader cryptocurrency landscape, as we witness unfolding developments on July 18, 10 A.M. eastern time.
Source: Coindesk
