Celsius seeks court approval to distribute proceeds from GK8 sale amid bankruptcy proceedings.
Agreement reached to allocate $24 million from GK8 sale to cover legal expenses and benefit initial Series B holders.
Galaxy Digital’s successful acquisition of GK8 adds 40 crypto experts.
Celsius Network, a cryptocurrency lending firm currently navigating bankruptcy proceedings, has recently made a motion to the court seeking approval for the distribution of funds obtained from the sale of its self-custody platform, GK8.
Could this bold move make the tide turn in their favor?
GK8 Sale Proceeds- Where Are They Going?
In a significant development, the debtors of Celsius Network revealed on July 17 that they had reached an agreement to allocate $24 million from the proceeds of the GK8 sale. This milestone settlement was achieved through constructive discussions involving the debtors, the creditors’ committee, and the initial consenting Series B preferred holders.
As per the proposed allocation outlined in the document, a sum of $24 million will be earmarked to cover legal expenses, with the remaining $1 million to be distributed among the holders. The agreement, while addressing the debtors’ obligations, also serves the dual purpose of reducing administrative costs and bringing benefits to the initial consenting Series B holders.
Read More: Breaking: SEC Files Lawsuit Against Celsius Network, CEO Alex Mashinsky Arrested
A Mutually Beneficial Objective
The court document highlights that the settlement agreement reflects the shared objective of all parties involved to steer clear of costly litigation and a protracted confirmation process. Both scenarios would otherwise lead to increased professional fees. The filing emphasizes the value of the settlement for the creditors and underlines the certainty it provides for everyone involved. With a clear aim in mind, the debtors urge the court to overrule objections and grant the requested relief, as set forth in the motion.
Let’s Backtrack… What Went Wrong in the First Place?
Back in late 2021, Celsius made headlines when it acquired GK8, a promising Israeli self-custody startup, for a staggering $115 million. The move was seen as a strategic step to solidify its position in the cryptocurrency lending space. However, unforeseen financial difficulties hit Celsius hard, and in the midst of a collapse in 2022, the company had to make the tough decision to divest GK8 as part of its restructuring plan.
Galaxy Digital Enters the Game
In late 2022, Galaxy Digital, spearheaded by the renowned Mike Novogratz, emerged as the successful bidder for GK8. This acquisition brought onboard a formidable team of 40 experts, including cryptographers and blockchain engineers, bolstering Galaxy Digital’s capabilities in the crypto arena. Additionally, the deal included GK8’s office located in Tel Aviv.
Read About It Here: Mike Novogratz’s Galaxy Digital Acquires Bankrupt Celsius
GK8’s New York Meeting
Making strides in 2023, GK8 held a meeting with prominent financial executives at its New York offices, showcasing its continued determination to provide innovative solutions in the crypto sector.
With Celsius Network’s motion now pending court approval, the outcome holds significant implications for all stakeholders involved. As the crypto industry evolves, this chapter in Celsius’ journey underscores the importance of prudent financial management and adaptability in a dynamic market. The final verdict from the court will undoubtedly shape the future trajectory of Celsius Network and the broader landscape of cryptocurrency lending.
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