$2 Billion in Cryptocurrency Will Be Distributed to Creditors as the Court Approves Celsius’s Bankruptcy Exit Plan

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Last Updated on November 10, 2023 by Bitfinsider

The bankruptcy plan for Celsius has been accepted. Customers can now easily receive shares in the reformed firm, which will be called NewCo, and see a portion of their monies returned.

On November 9, Judge Martin Glenn of the Southern District of New York Bankruptcy Court confirmed that Celsius’s creditors had unanimously approved the bankruptcy plan on September 27. The plan calls for redistributing shares in NewCo together with about $2 billion in Bitcoin and Ether to Celsius creditors. The business stated that it intended to start paying back creditors by year’s end.

A large portion of Celsius’s debtors took part in the Earn program, which enabled them to keep CEL tokens that were locked for a year in exchange for weekly payouts. Writer Judge Glenn stated in his ruling: “Nothing in this Confirmation Order or the Plan constitutes a finding of the Court under any securities laws or otherwise as to whether CEL Token or the Earn Program are securities.”

Securities, according to the US Securities and Exchange Commission, are programs like this. The current mining operations of Celsius, a former cryptocurrency lender, will be expanded by NewCo. Subject to regulatory approval, it will also carry out further developmental initiatives and monetize illiquid Celsius assets.

The Fahrenheit consortium, which consists of several crypto-native individuals and organizations, will oversee NewCo. Proof Group is a part of the consortium and is purportedly also putting in a bid for FTX.

In July 2022, Celsius filed for bankruptcy. Alex Mashinsky, the company’s former CEO, was taken into custody in July 2023 on suspicion of wire fraud, commodities fraud, and securities fraud. He is currently free on a $40 million bail and is scheduled to go on trial in September 2024.

Roni Cohen-Pavon, the former chief revenue officer of Celsius, entered a guilty plea to accusations of fraud and pricing manipulation. She will be sentenced on December 11.

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