Centralized finance (CeFi) platform Celsius Network is revealing plans to compensate users whose funds are still unavailable for withdrawal.
Celsius Network’s Huge Loss Plan
Celsius Network, which recently filed for bankruptcy, says one of the ways it could fill the $1.19 billion hole in its balance sheet is by selling minted Bitcoin (BTC) from its mining business.
“To bridge this gap in its balance sheet, the Company plans to engage with all constituencies, including the official committee of unsecured creditors (which will likely include mostly users), in a productive dialogue with the hope of building consensus around the Debtors’ potential chapter 11 [bankruptcy] plan of reorganization and, ultimately, a transaction that will maximize the value of the Company’s business for the benefit of the Company’s creditors. One way the Debtors intend to achieve this goal is by using the Bitcoin ‘minted’ by mining to address its current cryptocurrency deficit.”
According to Celsius Network, the CeFi platform’s crypto mining arm, Celsius Mining LLC, projects to generate approximately 15,000 Bitcoin in 2023 worth over $310 million at time of writing.
Celsius Network says that it could sell some of its assets or seek a strategic investor as part of the reorganization.
“The Debtors are aiming to file a plan that will provide users with choices and enable Celsius to return to normal operations. To fund plan recoveries, the Company may sell one or more of its assets and/or consider an investment from third-party strategic or financial investors in exchange for equity in a ‘reorganized’ Celsius.”
The CeFi platform says it had hundreds of thousands of active users who had account balances of over $100 as of this month.
“By July 2022, Celsius had approximately 1.7 million registered users and approximately 300,000 active users with account balances of more than $100, and approximately $6.0 billion in assets and was preparing to go forward with an initial public offering of Debtor Celsius Mining LLC.”
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