American Regulator Urged to Approve Celsius Network’s Bitcoin Mining Transformation
A New York judge overseeing the bankruptcy of Celsius Network has called on the U.S. Securities and Exchange Commission (SEC) to promptly decide whether it will allow the company to transition into a crypto mining firm. The proposal aims to repay customers of the defunct cryptocurrency lender with both digital assets and stock in a new publicly traded mining entity.
Judge Martin Glenn Seeks Expedited SEC Decision
Judge Martin Glenn has urged the SEC to expedite its decision-making process due to the rapid progress made by Celsius and its creditors through Chapter 11. During a court hearing, Judge Glenn expressed his hope for a swift resolution:
The SEC will make whatever decision it believes is the correct one. I just hope the process will move forward, so if there are any bumps in the road we can try and work those out along the way.
Repayment Plan Details
The proposed plan aims to partially repay customers who have had their accounts frozen since before Celsius filed for bankruptcy in June 2022. This repayment will involve a combination of cryptocurrency and stock in the newly formed crypto mining entity, which will be led by Arrington Capital as its management team.
Approval Process and Potential Liquidation
While Judge Glenn intends to issue a ruling as soon as possible, final approval from the securities regulator is still required. If the proposed transformation fails, Celsius may face liquidation.
Controversy Surrounding Repayment Proposal
Although the repayment proposal has garnered widespread support from creditors, some of Celsius’ customers prefer liquidation as it would provide them with more cryptocurrency instead of shares in an unproven new firm. Others have raised concerns about the fees paid to bankruptcy advisers who work to secure creditor support for the plan.
SEC Lawsuit Against Celsius Network
In July of this year, the SEC filed a lawsuit against Celsius Network and its former CEO Alexander “Alex” Mashinsky, accusing them of fraudulent promises regarding the platform’s “Earn Interest Program” and misleading investors about the company’s financial state. The agency also highlighted that investors were unable to withdraw billions of U.S. dollars in crypto assets when the business began to collapse.
Hot Take: SEC Decision Holds Key to Celsius’ Future
The U.S. Securities and Exchange Commission’s decision on whether to approve Celsius Network’s transformation into a bitcoin mining firm will significantly impact the company’s future. With Judge Martin Glenn urging an expedited decision, all eyes are on the regulator. While creditors largely support the repayment proposal, some customers remain skeptical and prefer liquidation over receiving shares in an unproven entity. As Celsius awaits its fate, it remains to be seen how the SEC will shape the outcome of this high-stakes case.
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