Celsius has emerged from Chapter 11 bankruptcy in the United States and is set to start distributing $3 billion worth of crypto and fiat to creditors, along with launching a new Bitcoin mining firm.

In a Jan. 31 press release, the crypto lender said its bankruptcy exit sees the creation of Ionic Digital, a Bitcoin 

mining company managed by Hut 8 and headed by Hut 8 chief commercial officer Matt Prusak.

Celsius said Ionic Digitial will “continue to deliver recoveries to creditors,” and its stock is “expected to be publicly traded once the requisite approvals are received.”

Around 98% of Celsius creditors agreed to the bankruptcy exit plan, which comes over 18 months after it paused withdrawals in June 2022 and filed for bankruptcy a month later.

Celsius added it increased the amount of crypto available for distribution to creditors by around $250 million through “converting altcoins to BTC or ETH and through previous settlements.”

In a court filing, Celsius said it will wind down its operations and discontinue its mobile and web applications by Feb. 28, with creditor distributions made through PayPal, Venmo and Coinbase, which some creditors have posted to X showing a claims form.

“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 a special board that steered Celsius through bankruptcy. “Our exit from bankruptcy is the culmination of an extraordinary team effort.”

At the time Celsius paused withdrawals, the company claimed it was to put it in a “better position to honor, over time, its withdrawal obligations” after the price of its native token, Celsius (CEL), plummeted in 2022.

Its bankruptcy saw Celisus settle $4.7 billion in fines with the United States Federal Trade Commission alongside settlements with the Department of Justice, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Its former CEO, Alex Mashinsky, was arrested and charged by federal prosecutors with various financial fraud, manipulating CEL’s price and misleading Celsius customers. Mashinsky has pleaded not guilty and is out on a $40 million bond pending his trial in September.

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