Celsius Network Customers’ Company Is Facing Liquidation Crisis

Key Points:

• Some creditors of Ionic Digital, a Bitcoin mining firm tied to Celsius Network customers, are considering liquidation due to management and financial concerns.
• Delays in going public and recent leadership changes have sparked dissatisfaction among shareholders.
• Despite issues, Ionic remains cash flow positive with $200 million in assets.

Bitcoin mining company, Ionic Digital, owned by former Celsius Network customers, may be liquidated after some of the company’s creditors have raised doubts about its management and financial condition.

Read more: Celsius Network Burns $90M Worth of Platform Tokens 

Celsius Network Customers’ Company Faces Possible Liquidation Amid Management Concerns

Initially formed to compensate former Celsius Network customers, Ionic has struggled to meet its goals, causing dissatisfaction among its shareholders.

According to Bloomberg, these plans to go public have been delayed, adding to creditor frustration. At a New York bankruptcy hearing on Tuesday, Joseph Sarachek, an attorney for some Celsius creditors, said that his office had been contacted by several shareholders interested in trying to force a liquidation of Ionic’s assets. Another creditor spoke about trying to drum up support to oust Ionic’s board of directors.

Ionic Digital Remains Financially Positive Despite Growing Criticism

Recent setbacks, including the resignation of Ionic’s auditor, RSM US, in May and the departure of CEO Matt Prusak earlier this month, have added to the concern about governance. Those developments led some creditors to question whether the board was competent to run the firm.

But Gregory Pesce, an attorney for Ionic, said in a court hearing, however, the company is not aware of any shareholder group with enough voting power to enforce a sale or board changes. He further explained that though Ionic is not seeking mergers or acquisitions, the board is willing to consider any legitimate shareholder proposals.

Ionic was formed to make good on buyer claims filed after Celsius Network declared Chapter 11 bankruptcy in 2022. At a time when the industry faces a challenging market environment, according to the company, Ionic’s cash flow through remains positive, with nearly $200 million of cash and cryptocurrency.