- The U.S. bankruptcy court has approved Celsius’ plan to transition its focus to Bitcoin mining.
- Celsius will be led by U.S. Bitcoin Corp., parting ways with the originally selected bidders.
- The approved bankruptcy plan frees up $225 million worth of crypto, benefiting customers.
The U.S. bankruptcy court has granted approval for cryptocurrency lender Celsius’s Network to pivot to Bitcoin mining, according to a Reuters report.
A U.S. bankruptcy judge has approved the request, ruling that the company could deviate from the previously approved bankruptcy plan. The judge cited that the creditors and customers “were no worse off under the new restructuring.”
According to the U.S. Bankruptcy Judge Martin Glenn in Manhattan, the bankruptcy plan, which was approved in November, contained enough flexibility to allow Celsius to switch to a backup plan. The switch was deemed reasonable after Celsius reached a “road block” with the U.S. Securities and Exchange Commission.
Furthermore, in light of becoming a Bitcoin mining company, Celsius will no longer be associated with certain selected bidders for the new company. The responsibility of operating the newly formed creditor-owned mining business will fall under the purview of U.S. Bitcoin Corp.
Initially, the U.S. Bitcoin Corp. was going to manage Celsius alongside other companies in a consortium of bidders known as Fahrenheit.
Reuters reported that the U.S. Department of Justice argued that the change required Celsius to put a proposal up for a new vote by creditors. The U.S. bankruptcy judge claimed that the mining plan was “not the deal that the creditors voted on” in a November 30 court hearing.
Additionally, the bankruptcy plan frees up $225 million in cryptocurrency assets, according to Reuters, that would have been used to fund the new business line, which was rejected by the SEC. As a result, customers will have the opportunity to benefit from this sum, according to the judge.
Moreover, Judge Martin Glenn mentioned that customers would also receive equity shares in the new Bitcoin mining business.
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