Celsius Bankruptcy Plan Given Green Light; Customers Set to Recoup Funds, Gain NewCo Shares
Summary:
Celsius' bankruptcy plan has been confirmed, allowing customers to recoup some of their funds and gain shares in the restructured company, NewCo. Around $2 billion in Bitcoin and Ether will be distributed to Celsius creditors, along with NewCo equity. NewCo is set to expand former mining operations and monetize illiquid Celsius assets, under Fahrenheit consortium management. Celsius CEO Alex Mashinsky, arrested on fraud charges, will stand trial in September 2024.
The plan for Celsius bankruptcy has received affirmation. This milestone paves the way for consumers to recuperate a portion of their funds and obtain a stake in the reborn entity, christened NewCo. On November 9, Judge Martin Glenn of the Southern District of New York Bankruptcy Court validated the bankruptcy blueprint endorsed overwhelmingly by Celsius' creditors on September 27.
The plan involves a redistribution of roughly $2 billion in Bitcoin (BTC) and Ether (ETH) to Celsius' creditors, coupled with equity in NewCo. The firm has expressed its intention to commence the reimbursement of creditors before the year ends.
A sizable fraction of the Celsius creditors took part in its Earn program, which offered them the opportunity to receive weekly returns by holding CEL tokens for a year. However, as Judge Glenn highlighted in his verdict, this confirmation doesn't amount to a court's finding under any securities legislation on whether the CEL Token or the Earn Program are securities.
The US Securities and Exchange Commission has taken a stance that such programs fall under the category of securities.
Moving forward, NewCo intends to broaden its previous mining operations, a move subject to regulatory approval. It also plans to unlock the value of Celsius' illiquid assets and undertake several other developmental tasks. The management of NewCo will be in the hands of the Fahrenheit consortium, which is comprised of multiple individuals and entities that make up the crypto ecosystem. Proof Group, a member of the consortium, is believed to also be in the race for FTX.
Celsius initially announced bankruptcy in July of 2022. CEO Alex Mashinsky faced arrest in July 2023 on allegations of securities fraud, commodities fraud, and wire fraud. He is slated for trial in September 2024 but is currently at liberty on a $40 million bail. Roni Cohen-Pavon, the former chief revenue officer of Celsius, admitted to charges of fraud and price manipulation, with sentencing set for December 11.
Published At
11/9/2023 8:14:58 PM
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