Celsius Comeback Plan Faces SEC Scrutiny, Prompts Mining NewCo Changes

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Celsius Debtors Seek to Merge CNL, LLC Amid Record-keeping Deficiency
  • Celsius transitions from a bankrupt crypto lender to a mining-centric venture.
  • The move follows Chapter 11 confirmation along with feedback from the SEC.
  • Celsius discloses plans to create a publicly traded Bitcoin mining company that Celsius customers own.

The bankrupt crypto lender Celsius is set to undergo a significant transformation in its operation following confirmation of its Chapter 11 by the United States Bankruptcy Court for the Southern District of New York.

Celsius has disclosed its intention to shift its focus towards a mining-centric venture. This move came in response to feedback from the U.S. Securities and Exchange Commission (SEC) regarding certain aspects of its restructuring plan.

The confirmed plan initially outlined the creation of a new publicly traded Bitcoin mining company, referred to as “Mining NewCo,” which would be owned by Celsius customers. This strategic move aligned with the original vision of establishing a new company with Fahrenheit, LLC.

However, due to regulatory considerations raised by the SEC, Celsius has revised its approach. Celsius shared this development in a recent post on the X platform (formerly Twitter).

Celsius, in collaboration with the Official Committee of Unsecured Creditors, concluded that Celsius’ estates must retain specific assets slated for transfer to the initially proposed Fahrenheit NewCo. Per the report, the retention is deemed necessary for regulatory compliance and will allow for administration and monetization to benefit creditors.

Furthermore, the report noted that Celsius is actively engaged in discussions with potential partners to finalize the terms and conditions governing the future management of Mining NewCo. It was noted that further details will be disclosed as negotiations progress. 

Notably, the Celsius debtors anticipate a reduction in the overall scope and scale of the Mining NewCo compared to the original Fahrenheit NewCo amid the ongoing discussion. They expect that the aggregate fees and economic incentives for operators of Mining NewCo will be lower than the fees associated with Fahrenheit NewCo.

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