Celsius Seeks Approval for Customer Repayments and Reorganization Plan
The embattled crypto lender, Celsius, is currently in court seeking final approval to initiate customer repayments by year-end and gain complete approval for its reorganization plan. During a recent court hearing, the company’s legal counsel revealed that a new entity called NewCO will emerge with $450 million in seed funding once the reorganization is approved.
Restructuring and Repayment Plans
According to a document filed recently, the repayment to creditors will involve a combination of $2.03 billion in Bitcoin and Ethereum and shares in the newly established company following the reorganization. The troubled network aims to enter the Bitcoin mining niche through its new entity, NewCo, which will offer a user-owned Bitcoin miner.
Reports suggest that NewCo will primarily secure its funding from a consortium called Fahrenheit LLC, led by Arrington Capital. Celsius’ filed document states that most creditors have approved the proposed restructuring plans.
Celsius’ Past Rocky Months
Celsius faced troubles last year due to the fall of Terra and subsequent contagion affecting multiple projects. In recent months, it has faced harsh developments, including a $4.7 billion fine from the U.S. Federal Trade Commission for mismanaging customer funds. This restructuring plan could mark one of the first successful resurrections of a failed crypto platform through Chapter 11 bankruptcy.
Hot Take: A Potential Turnaround for Celsius
If approved, Celsius’ reorganization plan would be a significant milestone for the crypto industry. It would not only allow customer repayments but also pave the way for the company’s revival as NewCo enters the Bitcoin mining market. While other networks like FTX are pursuing similar plans, Celsius may become the first crypto company to successfully bounce back after the challenges faced in 2022. However, it remains to be seen whether the plan will receive approval from the judge and security watchdogs.
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