Celsius Network’s Bankruptcy Approval
The New York bankruptcy court has approved Celsius Network’s restructuring plan, allowing the cryptocurrency lending platform to exit bankruptcy and move forward.
The US Securities and Exchange Commission (SEC) still needs to approve the company’s new bitcoin mining firm.
Celsius Restructuring Plan Confirmed
After more than a year of bankruptcy and fund freezing, Celsius has received confirmation to implement its restructuring and repayment plan from Judge Martin Glenn of the US Bankruptcy Court Southern District of New York.
The court ruling confirmed the plan under section 1129 of the Bankruptcy Code, marking a significant development for the company after experiencing a liquidity crisis and collapse in 2022.
Celsius’ restructuring plan involves transitioning to a new bitcoin mining entity called NewCo, owned by creditors, and distributing $2 billion worth of BTC and ETH to customers, along with shares in the new company.
Management of NewCo will be handled by Fahrenheit LLC, a consortium including companies like Coinbase, as previously reported by CryptoPotato.
SEC Approval and Future Plans
Although Celsius has received bankruptcy approval, NewCo still requires approval from the SEC, as mentioned in a Bloomberg report. If the bitcoin mining plan fails, the crypto lender may move to liquidation.
Alex Mashinsky’s Trial and Settlements
Following Celsius’ approval to exit bankruptcy, the company’s former CEO, Alex Mashinsky, is set to stand trial in September 2024. Mashinsky was arrested in July 2023, accused of defrauding Celsius customers and manipulating the value of the platform’s native coin, CEL. He has denied these allegations and pleaded not guilty.
Another former Celsius executive, Roni Cohen-Pavon, has pled guilty to criminal charges and is cooperating with investigators. Additionally, Celsius reached a settlement with the FTC to pay a $4.7 billion fine and is prohibited from handling customer funds.
### News source: cryptopotato.com