According to Bloomberg, crypto lending provider Celsius Network is seeking court approval for a restructuring plan aimed at repaying its customers following the outcome of the bankruptcy case. If Celsius Network obtains this approval, it aims to partially repay customers whose funds have been frozen on the platform since June 2022.
$450 Million in Capital
During the bankruptcy hearing held in New York on Monday, Celsius Network’s attorney, Christopher S. Koenig, announced that they would establish a new mining company, emerging from Chapter 11. It was stated that $450 million in capital and financial support would be provided from a group of companies chosen to manage the mining operation.
Regulatory Approval Required
Celsius also conducted a poll among its users regarding the creation of a new company under the ownership of the defunct crypto lending institution. Furthermore, securities regulators’ approval is necessary for launching this new venture in the mining industry.
“We received support from over 95% of the voting account holders in both number and dollar amount.”Celsius
$2 Billion Worth of Bitcoin and Ethereum to Be Sold
However, according to court documents, if the new company fails, the business may be liquidated, potentially resulting in reduced repayment to Celsius creditors. Celsius plans to make partial repayments to creditors by selling its holdings of $2 billion worth of Ethereum and Bitcoin, in addition to the shares of the new company.
#Celsius will distribute at least $2.03B of crypto to Creditors.— Celsius NewCo Community (@CelsiusNewCo) October 2, 2023
Meanwhile, NewCo will be seeded with up to $450 million in crypto.
Finally, it is expected that Celsius Network’s Interim CEO, Chris Ferraro, will provide a statement in support of the bankruptcy plan.