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Celsius Agrees to $25 Million Settlement with Series B Investors Regarding Distribution of GK8 Sale Earnings
The insolvent cryptocurrency lender Celsius, along with its creditors and Series B stakeholders, has come to an agreement concerning the allocation of $25 million derived from the sale of crypto custodian GK8.
The filing indicates that the settlements aim to utilize $24 million for legal costs, while the remaining $1 million will be distributed among the Series B stakeholders. The court document further mentions that the settlement arrangement was established out of a “shared intention” to avert expensive legal conflicts and a prolonged confirmation process, which would result in increased professional fees.
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- The accord among the Debtors, the Committee, and the Initial Consenting Series B Preferred Holders is described as having been “carefully negotiated and is highly reasonable.”
- The filing stated,
“The Settlement concludes nearly a year of intensely contentious litigation and eliminates one of the major barriers to confirmation and emergence in exchange for a $25 million cash settlement from the proceeds of the GK8 sale and a mutual release of claims between the Initial Consenting Series B Preferred Holders and the Estate Parties.”
- GK8 was initially purchased by Celsius for an undisclosed sum, later contested to be $115 million, in November 2021.
- However, as Celsius sought Chapter 11 bankruptcy protection last summer following the downfall of Terra’s ecosystem, Galaxy Digital, led by Mike Novogratz, agreed to acquire the Israel-based firm as part of the bankruptcy process.
- The former CEO of Celsius, Alex Mashinsky, was arrested last week and faces charges of wire fraud and other offenses.
- US prosecutors have also claimed that the executive inflated the price of his company’s cryptocurrency to attract customers to the platform.
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