Celsius Receives Approval to Transition into New User-Owned Company and Distribute Assets

Bankrupt Celsius to Transition into User-Owned Company and Distribute Assets

Bankrupt cryptocurrency lender Celsius has been granted permission to gather feedback from account holders on its transition into a new user-owned company and the distribution of its assets to customers. United States Bankruptcy Judge Martin Glenn approved Celsius’ request to distribute voting ballots and supplementary materials to account holders, providing a breakdown of the company’s plan for repaying its debts.

Celsius Insights and the State of the Crypto Industry

Glenn’s approval is contingent on the company’s advisors being transparent with account holders about the volatile nature of the cryptocurrency industry and potential obstacles facing Celsius’ Bitcoin mining operations. Bitcoin’s price has experienced significant fluctuations since Celsius filed for bankruptcy in July 2022, reaching a low of $15,797 and a peak of $31,454. Currently, Bitcoin is valued at $29,366.

Acquisition Deals and Plans to Repay Creditors

Crypto consortium Fahrenheit won the bid to acquire $2 billion of Celsius’ assets and will operate Celsius under the new branding of “NewCo.” Account holders will own 100% of the new equity in NewCo. The voting process will determine how assets and equity will be distributed, with an estimated value of $2 billion in Bitcoin and Ethereum. Fahrenheit will also gain control of Celsius’ Bitcoin mining and staking operations. Celsius aims to repay creditors by the end of 2023, but Judge Glenn acknowledges that there is still significant work to be done.

Hot Take

Celsius’ transition into a user-owned company and the distribution of its assets marks a significant step in the cryptocurrency industry. The approval granted by Judge Glenn demonstrates the court’s recognition of the importance of transparency and involvement of account holders in the bankruptcy process. This development highlights the evolving nature of the industry and the need for clear plans and communication amidst volatile market conditions.