A US judge has approved a bankruptcy plan for a cryptocurrency lender that filed for bankruptcy in July 2022 after its token plunged 99% and withdrawals could not be made.
According to a recent lawsuit, Celsius Network’s new plan will generate money for a new mining and staking business spinoff aimed at paying back creditors.
The company, called “NewCo,” will have a balance sheet of $1.25 billion, of which $450 million will be liquid crypto.
Bankruptcy Judge Martin Glenn explains:
“NewCo plans to deploy some or all of this liquid cryptocurrency to earn staking returns on the Ethereum network, which would generate between $10 and $20 million per year.”
The mining portion of the company expects earnings before interest, taxes, depreciation and amortization (EBITDA) of $61.8 million in 2024, Glenn said.
NewCo will be owned by customers but managed by a collection of companies called Fahrenheit LLC.
The judge also notes that nothing in his order constitutes a finding under the federal securities laws determining whether or not crypto tokens or transactions are securities.
“The right of the U.S. Securities and Exchange Commission to challenge transactions involving crypto tokens on any basis is expressly reserved.”
Celsius Network’s native token, CEL, is trading at $0.262 at the time of writing. The 275th-ranked crypto asset by market capitalization is up nearly 5% in the past 24 hours.
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