Celsius wipes out Fahrenheit alliance, gets court approval for Bitcoin mining company

Celsius Network has been granted a second bankruptcy exit, following a deal with the Fahrenheit Consortium for an exclusive Bitcoin mining company.

On December 27, court filings show that Judge Martin Glenn gave permission to proceed with a second option previously approved by Celsius lenders, which would have involved creating a public company dedicated solely to Bitcoin mining, rather than a company that would manage multiple lines of business. by Fahrenheit Consortium.

This change came after the United States Securities and Exchange Commission (SEC) refused to grant the relief needed to implement the first option in the bankruptcy exit plan, the creation of a new company. According to the original plan, Newco will expand Celsius' mining operations and business activities. It is managed by the Fahrenheit Consortium, which includes a number of cryptocurrency startups and organizations, including Evidence Group, Arrington Capital, and Hut8.

“As it turned out, the SEC did not accept the relief needed to implement the Newco transaction. For that, the borrowers, with the support of the committee, changed the second method approved by the lenders: a systematic wind down,” the document says.

Under the new plan, creditors will receive part of their recovery in future shares of the bitcoin mining company. In addition, the plan will initially unlock $225 million in crypto assets to support new businesses that the SEC has rejected. According to the previously approved plan, approximately $2 billion in Bitcoin (BTC) and Ether (ETH) will also be redistributed to Celsius creditors.

Some creditors and the U.S. Justice Department's bankruptcy watchdog say Celicious should give the proposal a fresh vote, Reuters reported. But Judge Glynn ruled that the new restructuring strategy would not adversely affect creditors:

“[…] The court found that the MiningCo transaction would fall squarely within the confirmed scheme and would not constitute an amendment. But despite the amendment, there was no material adverse effect on the creditors so there was no need to re-inquire. Accordingly, wind-down movement is given.

Celsius It was one of several crypto lending firms that collapsed in 2022 and filed for bankruptcy in July. Former CEO Alex Mashinsky was jailed in July 2023 on charges of securities fraud, commodities fraud and wire fraud.

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