New York City, New York – November 10, 2023: A U.S. bankruptcy court on Thursday, November 9, approved a restructuring plan for crypto lender Celsius Network, which will allow the company to exit bankruptcy and repay customers.1
The plan, which was supported by the majority of Celsius’ creditors, will see the company transformed into a new Bitcoin mining company. Celsius will also distribute a portion of its remaining crypto assets to customers.
However, the plan is not without its critics. Some customers have argued that the plan does not adequately compensate them for their losses. Others have expressed concerns about the new Bitcoin mining company, which has no track record.
The approval is seen as a godsend for Celsius, which filed for bankruptcy in July 2022. The company’s collapse left thousands of customers unable to withdraw their funds.
Celsius customers are expected to start receiving repayments in early 2024. The amount of each repayment will depend on the value of Celsius’ crypto assets at the time of the distribution.
Celsius’ new Bitcoin mining company will be managed by Fahrenheit LLC, a consortium that includes hedge fund Arrington Capital. Fahrenheit has said that it plans to start mining Bitcoin in early 2024. Also See. 2 Details of the restructuring plan proposals can be seen here. 3
The Celsius Network platform allowed users to earn interest on their crypto deposits. The company also offered crypto-backed loans. Celsius filed for bankruptcy in July 2022 after it was unable to meet customer withdrawal requests.
- Reuters: https://www.reuters.com/markets/deals/crypto-lender-celsius-network-cleared-exit-bankruptcy-2023-11-09/[↩]
- Bloomberg: https://www.bloomberg.com/news/articles/2023-11-09/celsius-network-cleared-to-exit-bankruptcy-start-repaying-users[↩]
- Coindesk: https://www.coindesk.com/policy/2023/01/24/celsius-proposes-restructuring-to-offer-one-time-meaningful-recovery-payout-for-most-creditors/[↩]
