Celsius Network Receives Approval for $25 Million GK8 Sale Distribution
- Shams Ul Zoha
- July 19, 2023
- 2:23 pm
WHAT YOU SHOULD KNOW
- Celsius Network’s debtors filed a document seeking approval to distribute $25 million from the sale of self-custody platform GK8.
- The settlement aims to reduce administrative costs and avoid expensive litigation, providing certainty for all parties involved in the restructuring process.
- Galaxy Digital gained GK8’s team of 40 experts, including cryptographers and blockchain engineers, along with a Tel Aviv office.
Bankrupt crypto lender, Celsius Network, has sought approval for the distribution of funds from the sale of its self-custody platform GK8. On July 17, the debtors of Celsius filed a document stating that the Series B holders have reached a consensus to distribute $25 million from the proceeds of GK8’s sale. The settlement agreement, supported by debtors, creditors’ committee, and initial consenting Series B preferred holders, proposes allocating $24 million for legal expenses, with the remaining $1 million to be shared among the holders. The primary aim of the settlement is to reduce administrative costs and avoid costly litigation.
Celsius had purchased the Israeli self-custody startup GK8 for $115 million in late 2021. However, the crypto lender faced financial troubles and was compelled to sell GK8 as part of its restructuring plan after experiencing a collapse in 2022. Galaxy Digital, an investment firm led by Mike Novogratz, successfully acquired GK8 through a bid in late 2022. The acquisition granted Galaxy access to GK8’s team of 40 experts, including cryptographers and blockchain engineers, as well as an office in Tel Aviv.
The settlement agreement represents a mutual interest to avoid expensive litigation and ensures certainty for all parties involved in the restructuring process. It is seen as a strategic move to reduce administrative costs and provide value to the debtors’ creditors. The court is expected to review the motion and grant the relief requested in the filing.
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