Celsius reaches settlement with Series B holders

Bankrupt crypto lender distributes funds from sale of GK8.

Bankrupt crypto lender Celsius has reached a settlement with its Series B holders to distribute $25 million from the sale of crypto custodian GK8.

According to a filing reported by CoinDesk, $24 million of the settlement will be allocated to cover legal expenses, while the remaining $1 million will be distributed among the Series B holders.

The filing stated that the settlement brings an end to nearly a year of highly contentious litigation and removes one of the largest obstacles to confirmation and emergence. Despite some dispute over the proposed allocation of funds, the largest group of Series B shareholders is now urging the court to approve the settlement and move forward with the bankruptcy process.

Mike Novogratz’s Galaxy Digital agreed to purchase GK8 from Celsius in December for an undisclosed sum. GK8 was originally acquired by Celsius for $115 million in 2021. Celsius filed for Chapter 11 bankruptcy protection in July 2022 after the collapse of Terra’s ecosystem left the company insolvent. The Securities and Exchange Commission has since filed a lawsuit against Celsius and its ex-CEO Alex Mashinsky, accusing them of fraudulent and unregistered sales of “crypto asset securities,” lying to investors about the company’s financial standing, and manipulating the price of the Celsius native token.

Celsius is scheduled to appear in the United States Bankruptcy Court Southern District of New York at 10 A.M. ET today.