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- Creditors would receive approximately $2 billion in crypto assets from the insolvent crypto lender.
- Celsius plans to sell assets to crypto consortium Fahrenheit Holdings.
Creditors of bankrupt cryptocurrency lender Celsius [CEL] to have approved a plan that would repay a large portion of their property. Celsius will sell its assets to crypto consortium Fahrenheit Holdings. Fahrenheit won a bid to acquire Celsius in May 2023.
Creditors will receive approximately $2 billion in crypto assets from the insolvent crypto lender.
The judge presided over the case in August 2023 approved the voting mechanism. The majority of classes in the bankruptcy claim were approved with more than 98% of votes in favor of the reorganization. They are still waiting for final court approval.
The U.S. Bankruptcy Court for the Southern District of New York will hold a confirmation hearing for final approval on October 2.
The SEC recently filed a limited objection to Celsius’ restructuring plan due to “concerns under the federal securities law.” The committee in particular has expressed its concerns about the American crypto company Coinbase [COIN]’s involvement in the bankruptcy proceedings.
The lender will do that too distribute shares in a new company, NewCo.
NewCo will operate and grow the Debtors’ Bitcoin mining operations, deploy Ethereum, monetize the Debtors’ other illiquid assets and develop new value-added, regulatory compliant business opportunities.
Fahrenheit Holdings will lead this new company. Fahrenheit is controlled by former Algorand CEO Steven Kokinos, venture capital firm Arrington Capital, crypto miner US Bitcoin Corp, Proof Group Capital Management and Arrington Capital advisor Ravi Kaza.
What happened at Celsius after the bankruptcy last year
It was in July 2022 that it was Celsius archived for bankruptcy when the crypto winter started after the collapse of the Terraform Labs in May 2022.
In July 2023, the US Securities and Exchange Commission (SEC) indicted Celsius and its former CEO Alex Mashinsky for selling unregistered and fraudulent securities offerings involving “crypto asset securities.”
Also the US Department of Justice charged Mashinsky the same month with fraudulent financial activities, misleading investors and other similar charges.
The authorities arrested Mashinsky in July for fraud and price manipulation of the CEL token. The former CEO of Celsius did just that refuted costs. He soon was issued on a $40 million bond. A court hearing early this month ordered the freezing of his banking and real estate assets.
Celsius agreed reached a $4.7 billion settlement with the US over fraud claims, saying the deal would not hamper its restructuring plans.