• 28 May, 2024
News

Tether Secures 7.7% Stake in Celsius Shares Following Company’s Collapse

There has been a significant development in the crypto lending industry as Celsius has reached a settlement agreement with its creditors and Series B holders. This agreement is crucial for Celsius as it has been struggling with bankruptcy issues. According to a tweet by software developer Cam Crews, Tether, a well-known player in the crypto industry, now holds 7.7% of Celsius shares after its collapse.

As part of the settlement, an amount totaling $25 million would be distributed to the shareholders, with the funds derived from the sale of GK8, a self-custody platform. The majority of this amount, approximately $24 million, would be allocated to cover the legal expenses incurred by Celsius. The remaining $1 million would be divided among the group of shareholders.

Galaxy Digital, a leading digital asset firm, acquired GK8 from Celsius during the bankruptcy proceedings. Although specific details regarding the sale were not disclosed, Michael Wursthorn, a spokesperson for Galaxy Digital, previously indicated that the sale price was significantly lower than Celsius’s original purchase price of $115 million.

In addition to the settlement, Celsius successfully concluded its Series B funding round in November 2021. Initially targeted at raising $400 million, the round exceeded expectations and reached an impressive $750 million. Notable participants in the round included growth equity firm Westcap and one of Quebec’s pension funds.

Although the settlement provides relief to Celsius and some Series B shareholders, there were initial concerns about the allocation of $24 million for legal expenses. Simultaneously, another group criticized the distribution of $1 million, considering it an unfair benefit for a subset of shareholders.

Earlier this month, Celsius successfully liquidated approximately $25 million worth of various altcoins after receiving approval from a US court. The altcoins sold off by Celsius Network included popular cryptocurrencies such as Chainlink (LINK), BNB coin, Synthetix Network (SNX), 1INCH, 0x Protocol (ZRK), and Shiba INU’s BONE, among others.

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