Celsius Just Hit $25 Million Settlement Over GK8 Sale

Celsius, a crypto lending company that went bankrupt, has reached an agreement with its Series B holders to divide $25 million earned from the sale of the GK8 crypto custodian.

As per the settlement, $24 million will be used for legal expenses, while the remaining $1 million will be shared among the Series B holders. This information was first reported by CoinDesk on Monday in a filing.

“The Settlement brings an end to nearly a year of highly contentious litigation and removes one of the largest obstacles to confirmation and emergence in exchange for a $25 million cash settlement from the proceeds of the GK8 sale and a mutual release of claims between the Initial Consenting Series B Preferred Holders and the Estate Parties,” the filing stated.

Although there was some disagreement regarding the distribution of funds, an agreement was reached on the settlement. The main group of Series B shareholders is now urging the court to approve the settlement and proceed with the bankruptcy process.

In December, Mike Novogratz’s Galaxy Digital acquired GK8 from Celsius for an undisclosed amount. Celsius had purchased GK8 for $115 million in 2021.

After Terra’s ecosystem collapsed, a thing that left the company bankrupt, Celsius filed for Chapter 11 bankruptcy protection in July 2022.

Recently, Celsius and its former CEO Alex Mashinsky were sued by the Securities and Exchange Commission for allegedly engaging in fraudulent and unregistered sales of “crypto asset securities”.

The lawsuit also accuses them of misleading investors about the company’s financial position and manipulating the price of the Celsius native token, resulting in billions being raised illegally.

A few days ago, we reported the fact that according to a recently filed court document, Alex Machinsky, the founder of the bankrupt crypto lender Celsius, has been arrested and charged with various counts of fraud.

Stay tuned for more news and make sure to check out the markets as well.