Celsius Network’s Bitcoin Mining Plans Face Obstacles, Judge Hints at New Vote
Celsius, the crypto lending platform, may encounter difficulties in its plans to pivot to a Bitcoin mining model as a US judge suggests that another creditor vote may be necessary. The company had announced its intention to operate as a mining company to avoid regulatory scrutiny from the SEC. However, the judge overseeing the bankruptcy case expressed concerns about deviations from the terms that creditors had previously voted on. The main issue lies in potential opposition from creditors, and the judge urges Celsius to reach an agreement with the SEC. The financial regulator has previously opposed Celsius’ staking and lending-related activities due to improper registrations.
Celsius Argues Its Case
During a court session, Celsius argued through its attorney that another vote is unnecessary as the proposed deal would benefit all creditors by allowing the company to pivot into a mining business. Celsius sees this as a way to ensure a more sustainable future for itself and avoid further regulatory pressure from the SEC, which recently fined Kraken over its staking activities.
Bitcoin Mining Profitability and Dissenting Voices
Some analysts believe that Bitcoin mining is currently profitable due to rising asset prices. This is in contrast to last year when miners faced losses and had to employ various strategies to stay afloat. Two customers have expressed their dissent by calling for a full liquidation of Celsius. Under the new agreement, Fahrenheit will manage $225 million in digital assets for Celsius, providing creditors with a 67% recovery rate compared to 61.2% under the previous deal. The company’s mining operations will be managed by US Bitcoin Corp and Arrington Capital.
Hot Take: Challenges Ahead for Celsius’ Mining Pivot
Celsius Network’s plans to transition into a Bitcoin mining model face obstacles as a US judge suggests the need for another creditor vote. The judge’s concerns stem from deviations between the proposed deal and what was previously voted on by creditors. Celsius argues that the new deal would benefit all creditors and allow the company to pivot into a more sustainable mining business. However, opposition from creditors and potential regulatory scrutiny from the SEC pose challenges. Despite this, Bitcoin mining profitability has improved, and Celsius hopes to capitalize on this trend. The company’s mining operations will be managed by US Bitcoin Corp and Arrington Capital.
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