Celsius to Spend $24M from GK8 Sale on Legal Fees

The recent reports states that Celsius Network, an insolvent cryptocurrency lender which took over the Israeli cybersecurity business GK8 for $115 million, has decided to sell it for $25 million.

Celsius Asks Court’s Approval to Distribute $25M

Celsius asked the court for relief in the proceeding dealing with the distribution of the cash from the sale of the self-custody network GK8 on July 17.

Shareholders Grant Approval

According to the documents presented on behalf of the debtors, its Series B holders have agreed to a payment arrangement of $25 million from the proceeds of GK8’s sale. The Celsius shareholders advocated spending $24 million for legal expenditures and distributing the remaining $1 million among the holders.

The court document reads: “In light of the fact that the primary purpose of the settlement is to reduce administrative costs, the debtors agreed to and remain supportive of the proposed allocation, which provides the initial consenting Series B holders with reciprocal benefits.” 

Settlement Unlocks Tremendous Value for Debtors

On a positive note, it states that the “settlement not only unlocks tremendous value for the debtors’ creditors but also affords the debtors and all parties priceless certainty of the way forward. For the reasons set forth herein and the motion, the court should overrule the objections and grant the relief requested in the motion.”

Celsius Struggles Post Bankruptcy

It is worth noting that the purchase of the GK8 by Celsius was completed in November of 2021 with the objective to combine the resources belonging to both organizations. However, after a month of halting customer withdrawals owing to insolvency worries, the lending platform filed for bankruptcy protection under Chapter 11 in the United States of America. 

Consequently, Galaxy Digital Holdings Ltd, an accounting and investment management organization active in blockchain technology, won the bid in a sale procedure held in connection with the asset sale of Celsius Network’s Chapter 11 bankruptcy. In addition, this month witnesses GK8 hosting an event with executives from financial institutions in their New York headquarters.