Celsius' Next Generation to Receive $450 Million Funding Upon Approval of Restart Strategy

NewCo’s Plan to Restart Business with $450 Million in Cryptocurrency

Ahead of a confirmation hearing, the prospective successor to bankrupt crypto lender Celsius, referred to as “NewCo,” revealed its plan to restart the business. According to a recent filing, NewCo stated that it would have no funded debt and receive seed funding of up to $450 million in cryptocurrency if the court approves the plan.

Repaying Customers by Year-End

NewCo also announced its intention to begin repaying customers whose funds were frozen after Celsius’s collapse by the end of this year. Bloomberg reported that this was viewed as the best recovery option for customers.

Management by Fahrenheit

Fahrenheit, an investment consortium, will manage NewCo. They have committed to investing up to $50 million as an equity stake in the new business. Fahrenheit’s management team will be compensated in NewCo’s common stock.

Distributing $2 Billion Worth of Bitcoin and Ether

As part of the plan, debtors will distribute approximately $2 billion worth of bitcoin and ether to creditors as soon as possible. The aim is for NewCo to be listed on Nasdaq to maximize liquidity.

Court Approval Pending

Judge Martin Glenn is currently reviewing NewCo’s reorganization plan, which also requires clearance from securities regulators. The majority of Celsius creditors voted in favor of the plan last month. However, some customers oppose it, arguing that the new business has been overvalued.

Celsius’ Bankruptcy and Regulatory Scrutiny

Celsius filed for bankruptcy protection in July 2022 amid a crypto downturn, leaving billions of dollars owed to investors. The company has also faced scrutiny from multiple regulators, including the SEC, CFTC, and FTC.

Hot Take: A Potential Crypto Platform Revival

If approved, Celsius’s revival would be the first instance of a crypto platform recovering post-bankruptcy. However, if the plan fails, Celsius may go into liquidation, resulting in lower recoveries for creditors. The court hearing regarding the Chapter 11 plan is ongoing.