Celsius Network Faces Potential Pushback
Crypto lender Celsius Network may have to seek a new creditor vote on its proposed transition into a Bitcoin mining business, according to a report by Reuters. Last week, Celsius Network announced its decision to focus solely on Bitcoin mining following skepticism from the SEC regarding its other planned business lines. While the SEC did not formally object to Celsius Network’s previous bankruptcy plan, it expressed reservations about crypto lending and staking activities.
Judge Glenn raised concerns during the hearing, stating that the proposed transformation deviates from the deal initially approved by creditors. He emphasized that Celsius Network needed to address SEC concerns and expressed frustration over the lack of agreement. The revised deal could face significant opposition from creditors, according to Judge Glenn.
Opposition From Unrepresented Customers Seeking Full Liquidation
Under the revised plan, the post-bankruptcy mining business of Celsius Network will be overseen by US Bitcoin Corp instead of the Blockchain Recovery Investment Consortium (BRIC). Celsius attorney Chris Koenig defended this decision, stating that the BRIC deal was “stale” and highlighting US Bitcoin’s recent involvement with the Fahrenheit bid. An attorney representing BRIC argued that Celsius Network should have honored the backup bid agreement instead of pursuing a new deal.
Two customers, representing themselves without legal representation, expressed opposition to the deal in court papers filed on Wednesday. They argued that Celsius Network should be fully liquidated instead.
The Future of Celsius Network and the Broader Crypto Lending Industry
The proposed transformation of Celsius Network into a Bitcoin mining business faces potential obstacles as a US bankruptcy judge suggests that a new creditor vote may be necessary. The revised plan offers increased recovery for creditors, but its level of support remains uncertain. The outcome of this legal battle will significantly impact Celsius Network’s future operations and the broader cryptocurrency lending industry.
At present, Celsius Network’s native token, CEL, is trading at $0.2475. The token has experienced significant price increases of 6.7% over the past seven days and 3.9% over the past fourteen days.
Featured image from Shutterstock, chart from TradingView.com
Hot Take: Uncertain Future for Celsius Network’s Transition into Bitcoin Mining
The proposed transition of Celsius Network into a Bitcoin mining business faces hurdles as it may require a new creditor vote. While the revised plan offers increased recovery for creditors, opposition from unrepresented customers seeking full liquidation adds complexity to the situation. The outcome of this legal battle will have significant implications for Celsius Network and the wider crypto lending industry. As Celsius Network awaits a decision, its native token CEL continues to experience price growth, reflecting ongoing investor interest in the project.
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