US Judge Approves Bankruptcy Plan for Failed Crypto Lender Celsius
A US judge has given the green light to a bankruptcy plan for Celsius Network, a crypto lender that filed for bankruptcy in July 2022 after its token dropped by 99% and it was unable to meet withdrawal requests.
The new plan will generate funds for a new mining and staking corporate spinoff called “NewCo” aimed at repaying creditors. NewCo will have a $1.25 billion balance sheet, with $450 million in liquid crypto.
NewCo intends to stake some or all of this liquid cryptocurrency to earn staking yields on the Ethereum network, which could generate anywhere from $10 to $20 million annually. The mining portion of the business is projected to have 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $61.8 million.
NewCo will be owned by customers but managed by Fahrenheit LLC. The judge emphasizes that his order does not constitute a finding under federal securities laws regarding whether crypto tokens or transactions are securities.
Celsius Network’s native token, CEL, is trading at $0.262 at the moment and is up nearly 5% in the past 24 hours.
Hot Take: Celsius Network’s Bankruptcy Plan Gets Green Light From US Judge
A US judge has approved Celsius Network’s bankruptcy plan, allowing the failed crypto lender to create a new company called NewCo to repay creditors. The new entity will focus on mining and staking and aims to generate funds through liquid crypto assets. This move is expected to provide relief to creditors as Celsius Network continues to navigate its financial challenges.
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