Court confirms Celsius bankruptcy exit plan, $2B in crypto to go to creditors

Derek Andersen3 hours agoCourt confirms Celsius bankruptcy exit plan, $2B in crypto to go to creditorsThe decision ends the complex case with a creditor-approved plan that will see their partial reimbursement and make them shareholders in a new company.1948 Total views4 Total sharesListen to article 0:00NewsJoin us on social networksThe Celsius bankruptcy plan has been approved. The path is now clear for customers to see some of their funds returned and receive shares in the reorganized company, which will be called NewCo.

Judge Martin Glenn of the Southern District of New York Bankruptcy Court issued a confirmation on Nov. 9 that the bankruptcy plan was approved by Celsius creditors overwhelmingly on Sept. 27. Under the plan, around $2 billion in Bitcoin (BTC) and Ether (ETH) will be redistributed to Celsius creditors along with equity in NewCo. The company has said it hoped to begin reimbursement of creditors by the end of the year.Judge Martin Glenn"s bankruptcy plan confirmation. Source: Stretto

Many of the Celsius creditors were participants in its Earn program, allowing them to earn weekly rewards by holding CEL tokens that were locked for a year. Judge Glenn wrote in his decision:“Nothing in this Confirmation Order or the Plan constitutes a finding of the Court under any securities laws or otherwise as to whether CEL Token or the Earn Program are securities.”

The United States Securities and Exchange Commission has claimed similar programs are securities.

Related: Judge denies stakeholders’ request for representation in Celsius bankruptcy case

NewCo will expand the existing mining operations of former crypto lender Celsius. It will also monetize illiquid Celsius assets and conduct other developmental activities, subject to regulatory approval. 

NewCo will be managed by the Fahrenheit consortium, made up of several crypto-native persons and organizations. One of the consortium members is Proof Group, which is reportedly also bidding for FTX.pic.twitter.com/PwyMicXbr5— Celsius NewCo Community (@CelsiusNewCo) November 6, 2023

Celsius declared bankruptcy in July 2022. Its former CEO, Alex Mashinsky, was arrested in July 2023 on charges of securities fraud, commodities fraud and wire fraud. He is expected to be tried in September 2024 and remains free on $40 million bail.

Former Celsius chief revenue officer Roni Cohen-Pavon pleaded guilty to fraud and price manipulation charges and will be sentenced on Dec. 11.

Magazine: Tiffany Fong flames Celsius, FTX and NY Post: Hall of Flame# Business# Bankruptcy# Lending# earn# CelsiusAdd reactionAdd reactionRead moreHow blockchain, AI can help research into extending human lifePay and dump? How businesses accepting crypto payments influence adoptionBlockFi emerges from bankruptcy and opens wallet withdrawals