Celsius Network has secured the approval of the US
bankruptcy court to restructure its business. In the plan, the company has promised to return
crypto assets to customers and outlined a new vision for moving forward. This
marks an important phase for the crypto lender, which filed for bankruptcy
protection last year.
According to a report by Reuters, Celsius Network
will focus on mining new Bitcoin and earning staking fees through blockchain
transaction validation under the management of Fahrenheit LLC, a consortium
spearheaded by Arrington Capital. Approximately 600,000 Celsius’ clients, who
held an estimated $4.4 billion in interest-bearing accounts, suffered losses
when the company collapsed.
Celsius filed for Chapter 11 protection amid
financial turmoil, freezing customer accounts to prevent withdrawals. The
restructuring plan aims to rectify the situation, with Celsius expecting to
emerge from bankruptcy in early 2024. As part of the restructuring plan,
Fahrenheit will acquire a minority stake in the reorganized Celsius for $50
million. The new company will be publicly listed on
Nasdaq.
We are pleased to share that, following a successful creditor voting process and Confirmation hearing, the Court confirmed our Plan of Reorganization. https://t.co/bSemZ5f0k8
— Celsius (@CelsiusNetwork) November 10, 2023
Additionally, the restructuring plan has addressed legal matters facing the company,
valuing Celsius’ proprietary crypto token, CEL, at 25 cents. An examiner appointed by the court had previously raised concerns about the inflation of the token.
Besides that, the reorganized company plans to pursue litigation against
Celsius’ Founder, Alex Mashinsky.
Legal Hurdles Ahead
In September, the Former Chief Revenue Officer of
Celsius Network, Roni Cohen-Pavon, pleaded guilty in the US District Court for
the Southern District of New York, Finance Magnates reported. The guilty plea
was a response to charges related to a series of fraudulent activities and
price manipulations.
While Cohen-Pavon awaits his sentencing hearing on
December 11, Celsius Network’s CEO, Alex Mashinsky, has pleaded not guilty. Despite Cohen-Pavon’s guilty admission, Mashinsky continues to
contest all charges and is currently free on a $40 million bond.
The US authorities
froze some of Mashinsky’s assets, including bank accounts and a property in
Austin, Texas. This move aims to secure potential restitution for those
affected by the collapse of the Celsius Network. Simultaneously, Mashinsky’s
legal team has challenged the Federal Trade Commission’s case against him, seeking
its dismissal.
Celsius Network has secured the approval of the US
bankruptcy court to restructure its business. In the plan, the company has promised to return
crypto assets to customers and outlined a new vision for moving forward. This
marks an important phase for the crypto lender, which filed for bankruptcy
protection last year.
According to a report by Reuters, Celsius Network
will focus on mining new Bitcoin and earning staking fees through blockchain
transaction validation under the management of Fahrenheit LLC, a consortium
spearheaded by Arrington Capital. Approximately 600,000 Celsius’ clients, who
held an estimated $4.4 billion in interest-bearing accounts, suffered losses
when the company collapsed.
Celsius filed for Chapter 11 protection amid
financial turmoil, freezing customer accounts to prevent withdrawals. The
restructuring plan aims to rectify the situation, with Celsius expecting to
emerge from bankruptcy in early 2024. As part of the restructuring plan,
Fahrenheit will acquire a minority stake in the reorganized Celsius for $50
million. The new company will be publicly listed on
Nasdaq.
We are pleased to share that, following a successful creditor voting process and Confirmation hearing, the Court confirmed our Plan of Reorganization. https://t.co/bSemZ5f0k8
— Celsius (@CelsiusNetwork) November 10, 2023
Additionally, the restructuring plan has addressed legal matters facing the company,
valuing Celsius’ proprietary crypto token, CEL, at 25 cents. An examiner appointed by the court had previously raised concerns about the inflation of the token.
Besides that, the reorganized company plans to pursue litigation against
Celsius’ Founder, Alex Mashinsky.
Legal Hurdles Ahead
In September, the Former Chief Revenue Officer of
Celsius Network, Roni Cohen-Pavon, pleaded guilty in the US District Court for
the Southern District of New York, Finance Magnates reported. The guilty plea
was a response to charges related to a series of fraudulent activities and
price manipulations.
While Cohen-Pavon awaits his sentencing hearing on
December 11, Celsius Network’s CEO, Alex Mashinsky, has pleaded not guilty. Despite Cohen-Pavon’s guilty admission, Mashinsky continues to
contest all charges and is currently free on a $40 million bond.
The US authorities
froze some of Mashinsky’s assets, including bank accounts and a property in
Austin, Texas. This move aims to secure potential restitution for those
affected by the collapse of the Celsius Network. Simultaneously, Mashinsky’s
legal team has challenged the Federal Trade Commission’s case against him, seeking
its dismissal.