Bankruptcy company Celsius Network has reached an agreement with Series B investors to distribute $25 million from the sale of GK8 crypto custodian.
According to the agreement, $24 million will be used to cover legal costs, and the remaining $1 million will be divided among investors.
“The agreement ends a highly contentious litigation and removes one of the biggest hurdles to payouts of $25 million from the sale of GK8, including a mutual waiver,” the document says.
Series B investors are the largest contributors to Celsius. Now they are asking the court to approve the settlement agreement and continue the bankruptcy process.
The company acquired GK8 in November 2021 for $115 million. After filing for insolvency, the firm was put up for auction, which was won by Mike Novogratz’s Galaxy Digital. The amount of the deal was not disclosed, but the purchase was cheaper than originally for Celsius.
In June 2022, the crypto lending platform suspended withdrawals, exchanges, and transfers between accounts “due to extreme market conditions.”
After filing for bankruptcy, Celsius reported a $1.2 billion “hole” in its balance sheet. In August, it became known that the company’s liabilities exceeded its assets by $2.85 billion.
In September, the head of the platform, Alex Mashinsky, left the post of CEO. In early 2023, the New York Attorney General’s Office accused him of defrauding investors “for billions of dollars.”
Recall that on July 13, the US Department of Justice filed seven criminal charges against the ex-head of Celsius. These include securities fraud, manipulation of the CEL token price, and misleading investors.
Later, the US Federal Trade Commission announced the settlement of claims against the company. The agreement provides for the payment of $4.7 billion by the platform.
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