Compact crypto lender Celsius wants to start paying customers by the end of the year
Key receivers
Celsius will start paying customers soon
Trusted crypto lender Celsius Network is seeking court approval to start paying its customers by the end of the year. The company notified a judge on Oct. 2 that it was moving toward a reorganization plan.
#Celsius will distribute at least $2.03B in crypto for credit, with NewCo seeding up to $450 million in crypto.
— Celsius NewCo Community (@CelsiusNewCo) October 2, 2023
Celsius' legal counsel, Christopher Koenig, told the court that the new company, called Newco, is about to exit the process with $450 million in seed funding.
The cryptocurrency lender now wants to use $2.03 billion in Bitcoin and Ethereum to partially repay its creditors and store it in the new company. So far, NewCo has received support from a consortium called Fahrenheit LLC. The consortium is set to manage the company's mining and stock business.
Judge Martin Glenn is currently considering whether to approve Celsius' restructuring plan. However, the plan must be approved by securities regulators in the US.
While most creditors approve the reorganization plan, some do not. There is Celsius
“Borrowers reached over 95% of Voting Account Holders with quantitative and dollar-backed plans.”
Celsius may soon rise after filing for bankruptcy.
Celsius declared bankruptcy a year ago and is under fire from regulators. In July, the US Federal Trade Commission fined Celsius Networks for misappropriating $4.7 billion in user deposits.
Founder Alex Mashinsky is still in court after pleading not guilty to fraud charges brought against him by the US Department of Justice.
If Celsius' plan is approved, it would be one of the first failed crypto platforms of the past year to emerge after filing for Chapter 11 bankruptcy.
Following the failure of the Terra/Luna project, the company stopped issuing funds in June 2022, and investors have been waiting ever since to get their money.
