In a significant development, the majority of creditors of the crypto lending platform, Celsius, have voted in favour of a reorganization plan. This plan is set to return approximately $2 billion in Bitcoin and Ethereum to the creditors. The voting showcased a near-unanimous decision, with over 95% of creditors across all eligible classes accepting the plan, reflecting a collaborative effort during the Chapter 11 proceedings.
The plan, however, awaits final approval, scheduled for a confirmation hearing on October 2 in the United States Bankruptcy Court for the Southern District of New York. If approved, this plan will not only redistribute crypto assets to Celsius Network creditors but also allocate equity through a newly formed company, provisionally named “NewCo.”
NewCo aims to expand the debtors’ Bitcoin mining operations, stake Ethereum, monetize other illiquid assets, and explore new, value-accretive, and regulatory-compliant business opportunities. The Fahrenheit Group, a consortium of crypto-native individuals and organizations, will manage this new entity, contributing their extensive knowledge and experience in the crypto industry.
Celsius Network, faced severe repercussions in the 2022 bear market, leading to its bankruptcy filing on July 14, 2022. The company and its former CEO, Alex Mashinsky, were subsequently sued by the SEC for allegedly raising billions through unregistered and fraudulent offers involving crypto asset securities. Mashinsky faced arrest following accusations of fraudulent financial activity and misleading investors.