Celsius Network to Repay Over $2 Billion in Crypto to Creditors by 2023 End After Bankruptcy

Bankrupt Celsius Network Plans to Repay Creditors with Billions in Crypto by Year's End

"Celsius Proposes Restructuring Plan with "NewCo" Spinoff to Repay Customers and Focus on BTC Mining"

In a new development from a US bankruptcy court, Celsius has introduced a restructuring blueprint. The goal? To allocate resources for a novel corporate entity named “NewCo” and ensure the repayment of its customers.

The court document highlighted:

“The plan promises a distribution of approximately $2.03 billion in cryptocurrency to its creditors. However, this amount is contingent upon market fluctuations. The distribution will occur promptly after the plan's effective date, either via the NewCo transaction or through an orderly wind-down.”

As per the proposed scheme, while NewCo's ownership will be in the hands of the customers, its managerial reins will be held by a consortium named Fahrenheit LLC. This collective aims to venture into Bitcoin (BTC) mining and staking activities.

Another significant milestone for NewCo will be its envisaged listing on the NASDAQ as a publicly traded entity. As seed capital, NewCo is set to procure $450 million in cryptocurrency. Meanwhile, Fahrenheit has pledged a $50 million investment in the company, securing an equity stake in return, as delineated in the filing.

It’s worth noting that Celsius first encountered financial turbulence in July 2022. A dramatic 99% nosedive in its native asset’s value resulted in the company’s inability to process customer withdrawals, culminating in its bankruptcy filing.

A social media account managed by the company's creditors on platform X shared an optimistic timeline. Should the plan receive the green light, the restitution of customer losses could commence by the end of this year. The post read: “By 2023's close, Celsius foresees the possibility of commencing repayment to its customers. Both the creation of NewCo and the orderly wind-down strategy have been integral to this plan, garnering majority approval from various classes.”

Oct 05, 2023