By George Ward
A United States court has granted Celsius’ request to extend its exclusivity period. The new deadline assigned by the court is now February 15th, 2023.
The court’s approval would offer Celsius some months to submit a Chapter 11 restructuring plan. The recent approval comes after two court hearings that occurred on December 6th.
Celsius tweeted that it submitted a request for approval to sell its stablecoin holdings. According to Celsius, the funds will be used for its current operations.
The Judge is yet to give a verdict but promised to provide feedback soon. Celsius said it would use the new extension period to explore more opportunities that would benefit all stakeholders.
Last month, the crypto lender filed for an extension of its exclusivity period. The aim was to allow the company to reorganize its operations.
A Reorganization involves implementing a marketing strategy to modify a corporation’s organizational structure or financial situation. This could be in response to pressure from the government to improve its financial situation.
Celsius initially paused withdrawals on its crypto lending platform on June 13th, citing financial crises. Following the withdrawal halt, the crypto lender applied for bankruptcy on July 14th.
Furthermore, Celsius has chosen David Barse as its new director. Barse will be in charge of steering the firm through its restructuring process.
Meanwhile, Barse is an expert in the field of distressed investment. He is also the CEO and Founder of index business XOUT Capital.
Galaxy Digital Wins Bid For Celsius’ GK8
Celsius’s bankruptcy filing showed the company has a financial gap of about $1.2 billion. However, it turns out the real gap is actually over $2.85 billion.
Client deposits represented a huge part of the company’s liabilities which is $4.72 billion. Additionally, Celsius has mining assets valued at $720 million, CEL tokens worth over $600 million, and other digital assets worth $1.75 billion.
On December 2nd, a blog post revealed that the Mike Novogratz-owned investment company Galaxy Digital Holdings won a bid to purchase GK8. GK8 is an institutional virtual assets firm owned by bankrupt crypto lender Celsius Network.
The self-custody platform allows users to manage their assets. Other services that GK8 offers include trading, tokenization, NFT support, and staking.
Meanwhile, Galaxy Digital has to wait for court approval and fulfil certain conditions before finally taking over the firm. If the deal goes as planned, Galaxy will also acquire GK8’s team consisting of 40 workers.
This team includes blockchain engineers, cryptographers, and a Tel Aviv office. Meanwhile, Celsius paid $115 million to purchase GK8 in 2021. However, Galaxy has not stated its proposed amount during its bidding process.