Bankrupt Celsius to spend $24M from GK8 sale on legal expenses
Bankrupt cryptocurrency lending firm Celsius has requested the court to grant relief in the motion related to the distribution of funds from its sale of the self-custody platform GK8.
The Celsius Network’s debtors on July 17 submitted a filing stating that its Series B holders have agreed on a settlement to distribute $25 million from the proceeds of GK8’s sale.
The agreement was reached between debtors, the creditors’ committee and the initial consenting Series B preferred holders.
According to the document, the shareholders proposed allocating $24 million for legal expenses and the remaining $1 million to be distributed among the holders.
“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,” the filing reads.
According to the court document, the settlement agreement was borne out of the “mutual desire” to avoid costly litigation and a lengthy confirmation process with a corresponding increase in professional fees. The filing notes:
As previously reported, Celsius acquired the Israeli self-custody startup GK8 in late 2021 for $115 million. The troubled crypto lender was soon forced to sell GK8 as part of its restructuring plan following Celsius’ collapse in 2022.
Related: Former Celsius CEO Alex Mashinsky reportedly arrested
In late 2022, Mike Novogratz-led investment firm Galaxy Digital won the bidding to buy GK8. As part of the acquisition, Galaxy acquired GK8’s team consisting of 40 experts, including cryptographers and blockchain engineers, alongside an office in Tel Aviv. In July 2023, GK8 hosted a meeting with
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