Celsius Shifts Focus to Bitcoin Mining Following SEC Feedback
Celsius, a cryptocurrency lending firm, has announced that it will restructure its company to solely focus on Bitcoin mining. This decision comes after feedback from the United States Securities and Exchange Commission (SEC). The firm proposed that its reorganized company, known as ‘NewCo,’ will shift its core business to Bitcoin mining instead of staking. This strategic change was made in consultation with the Official Committee of Unsecured Creditors and in response to the SEC’s feedback.
As part of the restructuring plan, Celsius will retain some of its assets that were initially intended to be transferred to an entity called ‘Fahrenheit NewCo.’ The company also plans to make the ‘Mining NewCo’ publicly traded in the U.S. and owned by Celsius customers. The Debtors expect the distributions to creditors to commence in January 2024.
A Look Back
In July 2022, Celsius filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York due to a hiatus in withdrawals from its platform. The situation was further complicated when the SEC filed a lawsuit against Celsius and its former CEO, Alex Mashinsky, in July 2023. Mashinsky was subsequently arrested by the U.S. Justice Department on charges of securities fraud, commodities fraud, and wire fraud.
As of now, Mashinsky is out on $40 million bail, awaiting trial scheduled to start in September 2024.
Hot Take – Celsius Bets on Bitcoin Mining
Celsius is making a bold move by pivoting to focus exclusively on Bitcoin mining. This shift reflects the company’s commitment to adapt to regulatory feedback and explore new opportunities within the cryptocurrency space. As Celsius navigates through a challenging period, its decision to prioritize Bitcoin mining could open up innovative prospects and redefine its position in the industry.
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