As excitement for the latest bull market ramps up across the crypto ecosystem, some unfinished business from the last cycle is finally coming to a close as FTX and Celsius have made announcements related to their bankruptcy procedures.
During a Wednesday hearing in the U.S. Bankruptcy Court for the District of Delaware, FTX attorney Andy Dietderich announced that the defunct exchange had decided to scuttle plans to relaunch, and would instead put all of their focus on making creditors whole.
Dietderich said the exchange could “cautiously predict” fully repaying users and creditors, but added this was “an objective” and not a “guarantee.” He noted that “an exhaustive effort” to restart the exchange failed to find investors interested in launching FTX 2.0.
“Based on our results to date and current projections, we anticipate filing a disclosure statement in February describing how customers and general unsecured creditors […] with allowed claims will eventually be paid in full,” he said. “No investor is ready to commit the needed capital to a restart of the offshore exchange, nor has a buyer emerged for that exchange as a going concern.”
“The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high,” he added.
In November, representatives from the exchange announced they were exploring the possibility of relaunching the platform, which led to a 400% spike in the price of FTX Token (FTT) to a high of $5.54 on Dec. 10.
FTT/USDT Chart by TradingView
Most of those gains have since been erased, with FTT falling 35% after the cancellation of the reboot was announced. At the time of writing, FTT is trading at $1.95.
Celsius exits bankruptcy
Crypto lender Celsius announced that they have emerged from Chapter 11 bankruptcy by completing the transactions under its reorganization plan.
The plan includes the distribution of over $3 billion of cryptocurrency and fiat to Celsius’ creditors, and the creation of a new Bitcoin mining company – Ionic Digital, Inc. – which will be owned by Celsius’ creditors and will have its mining operations managed by Hut 8.
Celsius said Ionic Digital “was created as a new Bitcoin mining company that will continue to deliver recoveries to creditors. The Ionic Digital stock is expected to be publicly traded once the requisite approvals are received,” and the company “will be owned by Celsius’ creditors, who will own equity in the form of common stock.”
“The Plan was overwhelmingly approved by approximately 98% of the Company’s account holders and confirmed by the Bankruptcy Court for the Southern District of New York on November 9, 2023,” Celsius said. “This milestone marks the conclusion of an eighteen-month process during which the Company built consensus among a wide range of stakeholders, resolved complex novel legal issues, fully cooperated with all regulatory investigations, and developed and consummated the transactions under the Plan.”
The firm said it will “now pursue an orderly wind down of its operations, including discontinuing the Celsius mobile and web applications.” Creditors have the option to receive distributions through PayPal, Venmo, and Coinbase.
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