By George Ward
Celsius Network, the bankrupt crypto lender, is reportedly exploring more bids and new buyers after meeting with a potential buyer a few days ago. The crypto lender is looking to offload its assets after the Bankruptcy Court approved it as part of its restructuring plan.
Exploring Better Deals
According to a Reuters report, in a recent bankruptcy hearing in Manhattan, Chris Koenig, the Celsius attorney, revealed that the firm remains open to better offers. The company’s legal counsel stated that Celsius’ unofficial unsecured creditor’s committee (UCC) has met with a potential buyer to review the terms of another proposal.
Per reports, the bankrupt crypto lender has requested that Martin Glenn, the presiding judge of Celsius’ Chapter 11 bankruptcy proceedings, extend the deadline for submitting the bankruptcy restructuring plan based on the NovaWulf deal. The judge has agreed to grant Celsius three more weeks to enable it to submit the final restructuring proposal.
Last month, NovaWulf Digital Management reportedly signed a deal with the crypto lender to purchase its lending services subsidiary and help conclude its ongoing bankruptcy case. As a result, the debtors of the bankruptcy crypto lender presented the plan of sale to the US Bankruptcy Court of the Southern District of New York after agreeing to the deal.
Moreover, the plan proposes a deal with NovaWulf allowing Celsius Network to start returning crypto tokens in its custody to customers by June. In addition, the agreement was backed by the company’s creditors committee, which is part of the overall strategy to restructure Celsius’ retail enterprises and mining operations.
As part of the deal, creditors with claims of less than $5,000 with the Celsius Earn Account will receive 70% payment of their deposits in either Bitcoin, Ethereum, or USDC stablecoin. Furthermore, Celsius customers owed over $5,000 will be permitted to lower their claims to join the “convenience class.”
While creditors owed roughly $1,000 can opt out of this initiative, they can redeem some of the soon-to-be recovered funds.
Celsius Allots $25M for Customer Withdrawals
Celsius reportedly allocates $25 million in a specially created wallet for custodial account holders. The funds include $8.8 million worth of ETH, $10.39 million USDC, and a further $6 million in other digital assets.
As of Wednesday, custody account holders reportedly withdrew $17.7 million of the listed cryptocurrencies. Celsius acting CEO Chris Ferraro revealed in a court hearing that another $3.5 million withdrawals are in order.
Ferraro added that this represents 60% of the eligible custody account holders who have withdrawn their funds and 80% if crypto withdrawals are included. Early in March, Celsius announced that it had opened withdrawals for some selected custodial account holders.
However, the withdrawals are subject to certain limitations. The announcement came after the bankrupt crypto lender secured approval from the US Bankruptcy Court.
A court document authorized the firm to issue 94% of each qualified user custody fund in line. Meanwhile, Celsius stated that it would continue allowing withdrawals until all custody users can access their funds.