Vedant Sahu
Celsius, the crypto lender, has received approval from a New York court for its exit from bankruptcy, a process initiated in July of the previous year. The plan approved by the lender’s creditors will enable them to recover up to 85% of their holdings.
For customers who had funds locked up in Celsius, they will be receiving approximately $0.25 per CEL utility token.
Celsius expects to fully implement this reorganization plan by early 2024. This development follows Celsius’ $4.7 billion settlement with U.S. authorities over fraud allegations that arose during the bankruptcy proceedings. Former CEO Alex Mashinsky, who resigned in September 2022, faced fraud charges related to allegedly manipulating the price of CEL tokens. His trial is scheduled for September 2024, and his assets have been frozen by court order.
Chief Judge Martin Glenn of the United States Southern District of New York Bankruptcy Court confirmed a modified plan that had been largely agreed upon in late September. This plan will return 67%-85% of holdings to Celsius’ creditors. The CEL token, valued based on its utility within the Celsius Network, will be reimbursed at approximately $0.25 per token.
Celsius has committed to returning around $2 billion in cryptocurrency to its account holders, as reported by Reuters.
Control of the reorganization process will be entrusted to Fahrenheit Holdings, a consortium including Arrington Capital and U.S. Bitcoin Corp, who won the bid to acquire the struggling lender in May 2023. The plan involves establishing a new company registered in Delaware, temporarily referred to as NewCo. This entity will concentrate on mining and staking activities, boasting a $1.25 billion balance sheet. NewCo plans to stake some or all of its liquid cryptocurrency on the Ethereum network, potentially generating $10 to $20 million in annual staking yields.
Fahrenheit’s operation is poised to enhance the mining business, which boasts no debt, 125,000 rigs, excellent management through U.S. Bitcoin, and promising earnings potential moving forward, as stated in the filings.