Celsius Network has received approval from the US Bankruptcy Court to restructure its business. In the plan, the company promised to return crypto assets to customers and outlined a new vision going forward. This marks an important milestone for the cryptocurrency lender, which filed for bankruptcy protection last year.
According to a report by L Reuters, the Celsius Network will focus on mining new Bitcoin and earning hedging fees by validating blockchain transactions under Fahrenheit LLC, a consortium led by Arrington Capital. Nearly 600,000 Celsius customers, who held an estimated $4.4 billion in interest-bearing accounts, suffered losses when the company collapsed.
Celsius filed for Chapter 11 protection amid the financial turmoil, freezing customer accounts to prevent withdrawals. The restructuring plan aims to rectify the situation, as Celsius expects to emerge from bankruptcy in early 2024. As part of the restructuring plan, Fahrenheit will acquire a minority stake in the reorganized Celsius for $50 million. The new company will be listed on the Nasdaq stock exchange.
We are pleased to announce that after a successful creditor vote and confirmation hearing, the court has confirmed our reorganization plan. https://t.co/bSemZ5f0k8
– Celsius (@CelsiusNetwork) November 10, 2023
Additionally, the restructuring plan addressed the legal issues facing the company, valuing Celsius’ cryptocurrency token, CEL, at 25 cents. A court-appointed examiner had previously raised concerns about token inflation. In addition, the reorganized company plans to file a lawsuit against Celsius’ founder, Alex Mashinsky.
Legal hurdles ahead
In September, Ronnie Cohen Pavone, former chief revenue officer at Celsius Network, pleaded guilty in the US District Court for the Southern District of New York, Finance Magnates reported. The guilty plea was in response to charges relating to a series of fraudulent and price-manipulating activities.
As Cohen-Pavon awaits his sentencing hearing on December 11, Celsius Network CEO Alex Mashinsky has pleaded not guilty. Despite Cohen-Pavone’s guilty plea, Mashinsky continues to contest all charges and is currently free on $40 million bond.
US authorities froze some of Mashinsky’s assets, including bank accounts and a property in Austin, Texas. This step aims to secure potential compensation for those affected by the collapse of the Celsius network. At the same time, Mashinsky’s legal team has appealed the FTC’s case against him, calling for it to be dismissed.
Celsius Network has received approval from the US Bankruptcy Court to restructure its business. In the plan, the company promised to return crypto assets to customers and outlined a new vision going forward. This marks an important milestone for the cryptocurrency lender, which filed for bankruptcy protection last year.
According to a report by L Reuters, the Celsius Network will focus on mining new Bitcoin and earning hedging fees by validating blockchain transactions under Fahrenheit LLC, a consortium led by Arrington Capital. Nearly 600,000 Celsius customers, who held an estimated $4.4 billion in interest-bearing accounts, suffered losses when the company collapsed.
Celsius filed for Chapter 11 protection amid the financial turmoil, freezing customer accounts to prevent withdrawals. The restructuring plan aims to rectify the situation, as Celsius expects to emerge from bankruptcy in early 2024. As part of the restructuring plan, Fahrenheit will acquire a minority stake in the reorganized Celsius for $50 million. The new company will be listed on the Nasdaq stock exchange.
We are pleased to announce that after a successful creditor vote and confirmation hearing, the court has confirmed our reorganization plan. https://t.co/bSemZ5f0k8
– Celsius (@CelsiusNetwork) November 10, 2023
Additionally, the restructuring plan addressed the legal issues facing the company, valuing Celsius’ cryptocurrency token, CEL, at 25 cents. A court-appointed examiner had previously raised concerns about token inflation. In addition, the reorganized company plans to file a lawsuit against Celsius’ founder, Alex Mashinsky.
Legal hurdles ahead
In September, Ronnie Cohen Pavone, former chief revenue officer at Celsius Network, pleaded guilty in the US District Court for the Southern District of New York, Finance Magnates reported. The guilty plea was in response to charges relating to a series of fraudulent and price-manipulating activities.
As Cohen-Pavon awaits his sentencing hearing on December 11, Celsius Network CEO Alex Mashinsky has pleaded not guilty. Despite Cohen-Pavone’s guilty plea, Mashinsky continues to contest all charges and is currently free on $40 million bond.
US authorities froze some of Mashinsky’s assets, including bank accounts and a property in Austin, Texas. This step aims to secure potential compensation for those affected by the collapse of the Celsius network. At the same time, Mashinsky’s legal team has appealed the FTC’s case against him, calling for it to be dismissed.