Celsius Bankruptcy Case: $24M from GK8 Sale to Be Utilized for Legal Fees

The post Celsius Bankruptcy Case: $24M from GK8 Sale to Be Utilized for Legal Fees appeared first on Coinpedia Fintech News

Cryptocurrency lending firm Celsius, which is currently undergoing bankruptcy proceedings, has submitted a motion to the court seeking approval for the distribution of funds obtained from the sale of its self-custody platform, GK8.

According to recent filings, the debtors of Celsius Network announced on July 17 that an agreement had been reached to allocate $24 million from the GK8 sale proceeds. This settlement was reached through discussions involving the debtors, the creditors’ committee, and the initial consenting Series B preferred holders.

The proposal wants to allocate $24 million to legal expenses

The proposed allocation outlined in the document suggests that $24 million would be allocated for covering legal expenses, while the remaining $1 million would be distributed among the holders. The filing states that the agreement aims to reduce administrative costs, and the initial consenting Series B holders would also benefit from the proposed allocation.

The court document indicates that the settlement agreement was a result of the shared objective to avoid costly litigation and a prolonged confirmation process, which would lead to increased professional fees. The filing emphasizes the value of the settlement for the creditors and the certainty it provides for all parties involved. The debtors urge the court to overrule objections and grant the requested relief as stated in the motion.

Also Read: Celsius Sends Nearly $60M In Altcoins To Exchange! Is Altcoin Pressure Building Up?

In late 2021, Celsius made the acquisition of GK8, an Israeli self-custody startup, for $115 million. However, faced with financial difficulties, Celsius had to sell GK8 as part of its restructuring plan after experiencing a collapse in 2022.

Following a bidding process in late 2022, Galaxy Digital, led by Mike Novogratz, successfully acquired GK8. The acquisition included the addition of a team comprising 40 experts, including cryptographers and blockchain engineers, as well as an office located in Tel Aviv. In July 2023, GK8 held a meeting with financial executives at its New York offices.