Oct 03, 2023 Frank Stewskid
Troubled Crypto Lender Celsius Seeks Time to Repay Customers Amid Restructuring Efforts
Amid the challenges of the past year, the troubled crypto lender Celsius Network has now outlined plans to reimburse its customers by year's end. This move comes as the crypto lender Celsius seeks approval for its reorganization plan during a hearing held on October 2nd.
Christopher Koenig, the legal counsel representing Celsius Network, conveyed in his opening remarks in New York that a new entity, named "NewCo," will drive the repayment initiatives. With the crypto lender Celsius seeking liquidity, NewCo is expected to be launched with a robust $450 million in seed funding.
According to a recent filing, Celsius intends to allocate a mix of assets worth $2.03 billion, including major cryptocurrencies like Bitcoin and Ether, as well as stock in NewCo, to settle debts with its myriad of creditors.
Supporting the birth of NewCo is a consortium named Fahrenheit LLC. This collaboration is set to manage mining and staking ventures, hinting at a potential evolution in Celsius's business operations.
While Judge Martin Glenn deliberates on Celsius’s restructuring proposal, the plan's fate also hinges on approval from security regulators. Though the strategy has garnered significant backing from nearly 95% of voting account holders, a handful of creditors remain skeptical.
Celsius has not only grappled with internal restructuring hurdles but also external threats, such as the surge in phishing attacks on its creditors. However, should the restructuring gain the necessary approvals, it could witness one of 2022's pioneering collapsed crypto platforms making a comeback via a Chapter 11 bankruptcy case.
The events that transpire in the coming months will be pivotal for the Celsius Network. Once a titan in the crypto lending sector, the platform is now in a crucial phase, striving to reestablish trust and rejuvenate its operations.
