Bankrupt crypto lender Celsius, its creditors, and its Series B holders have agreed on a settlement to distribute $25 million from the proceeds of the sale of GK8 to the shareholders, with $24 million allocated for legal expenses and $1 million to be distributed amongst the group.
Self-custody platform GK8 was sold to Galaxy Digital as part of Celsius’ bankruptcy proceedings, and while the exact details of the sale were not disclosed, Galaxy spokesman Michael Wursthorn earlier told CoinDesk that the price was significantly less than the $115 million Celsius bought it for.
The bankrupt crypto lender closed its Series B round in November 2021. Growth equity firm Westcap and one of Quebec’s pension funds led the round, which was oversubscribed, expanding the raise from $400 million to $750 million.
Initially, one group of Series B shareholders argued that the $24 million allocated does not cover the entirety of their legal expenses, and another said that the $1 million represents an unfair “windfall” for a certain group.
The largest group of Series B shareholders said in a filing that they plan to share $1 million of the settlement equally with all preferred shareholders, and are arguing that the court should disregard objections and approve this settlement to allow the rest of the bankruptcy process – which would include retail users – to move forward.
Celsius and its creditors are due back in court in New York on July 18 at 10 A.M. eastern time.
Alex Mashinsky, the former CEO of Celsius, was arrested last week following an investigation into the company’s collapse, and the bankrupt lender is being sued by the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Federal Trade Commission (FTC).