Bitcoin Mining Firm Ionic Faces Potential Liquidation By Celsius Creditors – BitRss –

Bitcoin mining firm Ionic Digital Inc., co-owned by former Celsius Network customers, is under scrutiny as some creditors contemplate liquidation due to concerns over management and financial challenges. Initially intended to compensate former Celsius users, Ionic has faced setbacks in its plans to go public, prompting dissatisfaction among its shareholders.

Bitcoin Mining Firm Ionic Faces Potential Liquidation

Certain former customers of Celsius Network, now creditors of Ionic Digital Inc., are exploring the option of liquidating the Bitcoin mining firm. This development follows a series of delays in Ionic’s plan to list on the Nasdaq Stock Exchange. 

Recent disruptions, including the resignation of Ionic’s auditor, RSM US, in May, and the departure of CEO Matt Prusak earlier this month, have intensified shareholder concerns about the board’s ability to lead the company. As a result, some creditors are seeking to remove the current board of directors.

During a court hearing, Joseph Sarachek, a lawyer representing some Celsius creditors, stated that several shareholders have expressed interest in forcing a liquidation of Ionic’s assets. The delay in Ionic’s public listing, now pushed to sometime in 2025, has added to these concerns.

Ionic Financial Status & Response to Shareholder Concerns

In response to the potential liquidation, Gregory Pesce, a lawyer for Ionic, reassured the court that the company remains financially stable, highlighting its positive cash flow and holding of approximately $200 million in cash and cryptocurrency.

Pesce also noted that Ionic is not engaged in any merger or acquisition activities and that no shareholder group currently has enough voting power to enforce a sale or significant board changes.

Despite these assurances, the company faces delays in hiring a new auditor, a requirement for completing the public listing process as per federal regulations. This ongoing delay has contributed to growing frustration among shareholders.

Operational Challenges in Mining Developments

Ionic, created as part of Celsius Network’s bankruptcy proceedings to provide value to creditors, has been developing Bitcoin mining facilities in Ward County, Texas. Out of four planned buildings for its mining operations, only one has been completed, with the rest still under construction. Some creditors have criticized the slow development pace and the board’s apparent lack of experience in the crypto mining industry.

These mining operations are crucial to Ionic’s strategy for generating revenue and compensating former Celsius customers. However, the delays in construction and public listing have led some shareholders to view liquidation as a more immediate solution to recover their investments.

Meanwhile, Celsius Network’s bankruptcy proceedings continue to progress. The bankruptcy administrator recently reported that approximately $2.53 billion has been distributed to 251,000 creditors, covering about 93% of the total amounts owed to those creditors. However, around 121,000 creditors are still awaiting their distributions. Many of these creditors have smaller claims, which may explain their lack of urgency in claiming the funds.

The remaining distributions are being managed through regular attempts to transfer funds via Coinbase and by providing redeemable PayPal claim codes. Despite these efforts, unresolved issues surrounding Ionic’s future have added a layer of complexity to the ongoing bankruptcy process.

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