Bankrupt digital asset lender Celsius Network intends to start repaying creditors using billions of dollars in crypto assets before the end of the year. In a recent US bankruptcy court filing, Celsius has presented a restructuring plan that will generate funds for a new corporate spinoff, dubbed “NewCo,” and repay customers.
Says the filing, “Notably, the plan provides for a distribution of at least $2.03 billion of cryptocurrency to creditors, subject to fluctuations in the cryptocurrency market, on or as soon as reasonably practicable after the effective date of the plan under either the NewCo transaction or the orderly wind down.”
According to the plan, the NewCO would be owned by customers but managed by a collection of companies under the name Fahrenheit LLC, which will focus on Bitcoin (BTC) mining and staking. The intention is to also list NewCo as a publicly traded company on the NASDAQ. NewCo would receive $450 million in crypto for seed funding and Fahrenheit has committed $50 million toward the firm for an equity stake, the filing says.
Celsius first filed for bankruptcy in July 2022 after its native asset plummeted by over 99% and it was unable to fulfill customer withdrawals. An account on the social media platform X that is managed by Celsius creditors tells its followers that if the plan is approved, customers could start receiving lost funds before the end of the year.
“Celsius anticipates it could begin repaying customers before the end of 2023. Both NewCo and the OWD (orderly wind-down) options were part of the plan. Most classes ended up voting in favor of the plan.”
Source : The Daily Hodl by Daily Hodl Staff / October 04, 2023