Celsius Plans to Repay Customers by End of 2023
During a recent court hearing, Celsius, the insolvent crypto lender, expressed its intention to start repaying its customers by the end of 2023. Christopher Koenig, legal counsel for Celsius, informed the judge during the October 2 bankruptcy hearing that the company is seeking court approval to initiate payments to its customers by that time.
Celsius Reorganization Plan and NewCo
The creditors of Celsius have recently voted in favor of the firm’s reorganization plan, which could potentially allow them to recover between 67% and 85% of their holdings. A key aspect of this plan is the creation of a new company called NewCo. According to a filing submitted during the confirmation hearing, NewCo has received $450 million in seed funding that will be focused on Bitcoin mining and staking.
Fahrenheit Consortium and Ownership of NewCo
NewCo will be owned by Celsius’ customers but managed by crypto consortium Fahrenheit. In May, Fahrenheit successfully acquired Celsius through a bidding process. As stated in the court filing, Fahrenheit has committed to injecting up to $50 million as an equity stake in NewCo, and its management team will receive compensation in NewCo Common Stock.
Distribution of $2 Billion in BTC and ETH
As part of its proposed restructuring arrangement, Celsius plans to distribute over $2 billion worth of Bitcoin and Ether among its creditors. To enhance liquidity, NewCo intends to list on the Nasdaq stock exchange and grant Celsius’ creditors equity in the company.
Hot Take: Celsius Aims for Customer Repayments as Part of Restructuring Plan
Celsius is making progress towards repaying its customers with its recent reorganization plan. The creation of NewCo and the distribution of cryptocurrencies among creditors are key steps in this process. Celsius’ commitment to compensating its customers and aligning the interests of all stakeholders through equity stakes and stock compensation demonstrates its dedication to rebuilding trust and providing value. By prioritizing customer repayments and maximizing liquidity through a Nasdaq listing, Celsius is taking significant strides towards financial recovery.
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