- The bankruptcy court signaled a possible need for a new creditors’ vote in Celsius Network’s bid to transform into a Bitcoin mining company.
- Celsius Network intends to restructure the company, transforming it into a Bitcoin mining firm.
- The judge pointed out discrepancies between the creditors’ proposal and the company’s revised deal.
A recent Reuters report unearthed a new development in the bankrupt cryptocurrency lending company Celsius Network’s bid to transform into a Bitcoin mining company. Reportedly, U.S. Bankruptcy Judge Martin Glenn pointed out the discrepancy between the creditors’ proposal and the revised deal of the company.
Following Celsius Network’s collapse in 2022’s bearish market, the platform filed for Chapter 11 bankruptcy, suspending withdrawals. At the time, the platform’s liabilities, as revealed by them, amounted to a range of $1 billion to $10 billion.
In November, the bankruptcy court approved Celsius Network’s restructuring plan, a proposal that aims to recover the platform as a creditor-owned Bitcoin mining company. The deal also intends to reimburse customer funds and provide equity in the new firm, which would go by the name NewCo, under the consortium Fahrenheit LLC.
According to the revised scheme, the restructured Celsius will be managed by U.S. Bitcoin Corp. The company asserted that the restructuring plan focuses on Bitcoin mining and could yield better outcomes, arguing that NewCo will have a $1.25 billion balance sheet. In addition, they stated that NewCo could earn between $10 and $20 million per year as they intend to stake their liquid crypto to earn staking yields on the Ethereum network.
The creditors reportedly voted for a proposal that promised to return 61.2% of their holdings to them. Though the court previously approved the proposal, the platform stated that the Securities and Exchange Commission (SEC) hadn’t showered a positive signal. The judge called it a “broken record” as it failed to receive recognition from the regulators. In the recent development, Judge Glenn expressed disappointment with the creditors’ voting, asserting, “This is not the deal that the creditors voted on.” Reflecting on a possible clash over the deal, the judge added that the revised deal could trigger “substantial opposition” from creditors.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
