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Wednesday, April 17, 2024
HomeFinance NewsCelsius creditors back reorganization plan with majority approval.

Celsius creditors back reorganization plan with majority approval.

Creditors involved in the Celsius bankruptcy case have voted overwhelmingly in favor of a plan that will see them receive funds and equity in a new company. According to a filing from bankruptcy firm Stretto, the plan received more than 98% of favorable votes from most of the classes. However, final approval of the plan is still pending at a confirmation hearing scheduled for October 2 in the United States Bankruptcy Court for the Southern District of New York.

The proposed plan, outlined in a disclosure statement filed in August, seeks to redistribute approximately $2 billion worth of Bitcoin (BTC) and Ether (ETH) to Celsius Network creditors. Additionally, the plan includes the distribution of equity in a new company, temporarily referred to as “NewCo.” This new company will be managed by the Fahrenheit Group, a consortium of crypto-native individuals and organizations. It will operate the Debtors’ Bitcoin mining operations, stake Ethereum, monetize other illiquid assets, and develop new business opportunities that comply with regulations.

Celsius Network, a crypto lending platform, was hit hard by the 2022 bear market and filed for bankruptcy in July of that year. The Securities and Exchange Commission (SEC) subsequently sued Celsius and its former CEO, Alex Mashinsky, for allegedly engaging in unregistered and fraudulent offers related to “crypto asset securities.” Mashinsky was arrested on the same day and faced charges of fraudulent financial activity and misleading investors. These events marked the downfall of Celsius, but the proposed plan aims to distribute assets and provide a way forward for the company’s creditors.

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