On Tuesday, 98% of the Celsius Network creditors voted to approve a $2 billion restructuring plan that would see them receive about 65% and 80% of their funds. Moreover, the creditors will hold a stake in NewCo, a newly formed company, per the voting declaration submitted to bankruptcy court today.
Creditors approved the restructuring plan despite the United States Trustee, the authority that oversees the proceedings of bankruptcy cases, rejecting it. The plan, however, will only be implemented if the US Bankruptcy Court approves it during a hearing set for early next month.
The Reorganization Plan
According to the reorganization plan, Celsius Network will distribute Ethereum and Bitcoin worth $2 billion among the creditors. In addition, NewCo will restart Celsius crypto mining operations, stake Ethereum, and also explore new investment opportunities.
NewCo’s management team will be picked by Fahrenheit Group, the company that won the bid to buy out Celsius Network earlier this year. Backed by crypto investors like Proof Group Capital Management, US Bitcoin Corp and Arrington Capital, Fahrenheit Group is expected to provide capital for running the new venture.
Is Celsius Network’s Bankruptcy Coming to an End?
Celsius Network was once a prominent crypto player, boasting $5 billion in AUM (assets under management) in 2021. The company allowed customers to deposit cryptocurrencies to receive interest and borrow loans, with their deposits serving as collateral.
In July 2022, Celsius announced filing for Chapter 11 bankruptcy protection amid a market downturn. A year later, the company’s then-CEO Alex Mashinksy got arrested and later agreed to a personal recognizance bond worth $40 million for his release.
Today’s approval of the restructuring plan marks a massive step forward in the ongoing Celsius bankruptcy proceedings. The move appears to have provided an equitable and structured resolution that is set to benefit every stakeholder.
However, there is still a hurdle to overcome ahead. The restructuring plan mentions crypto exchange Coinbase as the partner that would help distribute the $2 billion in crypto to Celsius Network’s international clients. But the United States Securities and Exchange Commission is against the idea, claiming that it would implicate some of the concerns stated in its lawsuit against the exchange a few months ago.
HeraldSheets.com produces top quality content for crypto companies. We provide brand exposure for hundreds of companies. All of our clients appreciate our services. If you have any questions you may contact us. Cryptocurrencies and Digital tokens are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by our authors and the views expressed in them do not reflect the views of this website. Herald Sheets is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Read full terms and conditions / disclaimer.