Celsius’s Comeback: Court Approves Bankruptcy Reorganization Plan, Set to Soar by 2024!

"Celsius Emerges from Bankruptcy as New York Court Approves Recovery Plan, Creditors to Reclaim Up to 85% of Holdings"

Celsius, the crypto lender, has received approval from a New York court for its exit from bankruptcy. The approval comes after the lender’s creditors voted in favor of a plan that will return up to 85% of their holdings. Customers who had funds tied up in Celsius will receive approximately $0.25 per CEL utility token.

The reorganization plan, which was approved by the bankruptcy court on Thursday, is expected to be fully implemented by early 2024. This marks the end of Celsius’ bankruptcy process, which began in July of last year. As part of the process, Celsius also reached a settlement of $4.7 billion with U.S. authorities over fraud allegations. Former CEO Alex Mashinsky, who resigned in September 2022, was arrested on fraud charges related to the manipulation of the lender’s CEL token. Mashinsky has denied the allegations and is scheduled to stand trial in September 2024. He was released on a $40 million bond, and his banking and real estate assets have been frozen.

Chief Judge Martin Glenn of the United States Southern District of New York Bankruptcy Court confirmed a modified plan that had been agreed upon by Celsius’ creditors in late September. The plan will return 67% to 85% of the creditors’ holdings. Customers with funds in Celsius will receive approximately $0.25 per CEL token. Celsius has also announced that it will return around $2 billion in cryptocurrency to its account holders.

Under the judge’s order, the implementation of the reorganization will be overseen by Fahrenheit Holdings, a group that includes Arrington Capital and U.S. Bitcoin Corp. Fahrenheit won the bid to acquire Celsius in May 2023. The reorganization plan involves the creation of a new company registered in Delaware, currently referred to as NewCo. This new company will focus on mining and staking.

According to the filing, NewCo will have a balance sheet of $1.25 billion and intends to stake its liquid cryptocurrency on the Ethereum network. This is expected to generate annual yields of $10 to $20 million. The mining business, under Fahrenheit’s operation, is described as “getting better by the day” with no debt, 125,000 rigs, and a strong mining manager in U.S. Bitcoin. The filing also highlights the significant earnings power of the mining business moving forward.

In summary, Celsius has received court approval for its exit from bankruptcy, with creditors set to receive a significant portion of their holdings. Customers will also receive compensation for their funds tied up in Celsius. The reorganization will be overseen by Fahrenheit Holdings, and a new company, NewCo, will focus on mining and staking.

Martin Reid

Martin Reid

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