Bankruptcy Court Approves Celsius’ “MiningCo Transaction”
Celsius Network, a bankrupt cryptocurrency lending company, has received approval from the United States Bankruptcy Court for its proposed “MiningCo Transaction.” This milestone allows Celsius to move forward with its plan to establish a public company dedicated to bitcoin mining and restructure its operations.
The MiningCo Transaction involves capitalizing the new entity with $225 million in fiat and transferring specified mining assets. Celsius aims to relaunch as “NewCo,” focusing on staking and mining, with a projected $1.25 billion balance sheet and $450 million in liquid cryptocurrency.
The court’s order also approves modifications to the Management Agreement and includes provisions for early termination if NewCo fails to reach its mining capacity target within three years. Additionally, Fahrenheit will buy a $50 million stake in the new company.
Court Ruling Resets Guidelines for Celsius’ Wind-Down and Creditor Settlements
The court ruling nullifies previous agreements related to unsecured claims and establishes new guidelines for Celsius’ wind-down and creditor settlements. The court has sanctioned a budget of approximately $70 million for expenses during the wind-down process.
It’s important to note that the court’s ruling does not affect the Securities and Exchange Commission’s rights regarding crypto tokens. The SEC retains authority over challenging transactions involving crypto tokens, while the court maintains jurisdiction over matters related to the implementation of this order.
Hot Take: Celsius Moves Closer to Recovery with MiningCo Transaction Approval
Celsius Network’s approval of the MiningCo Transaction marks a significant step towards its recovery. By establishing a dedicated bitcoin mining company, Celsius aims to stabilize and restructure its operations. The transaction includes substantial capitalization and asset transfers, positioning NewCo for success in the crypto market. Additionally, the court ruling on wind-down guidelines and creditor settlements provides clarity for Celsius’ future. Despite the SEC’s retained authority over crypto tokens, Celsius can now focus on rebuilding its business and addressing customer losses. The approved MiningCo Transaction paves the way for Celsius’ resurgence in the coming months.
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