Celsius Seeks Approval To Start New Company Owned By Creditors

Key Points:

• Celsius began consulting customers on plans to restart as a new company owned by creditors.
• The reboot plan has been authorized by its bankruptcy judge.
• If the proposal is successful, the client will receive some profit through equity in the new company.

According to Bloomberg News, bankrupt crypto lending platform Celsius plans to set up a new company owned by creditors and distribute around $2 billion in Bitcoin and Ethereum. The plan received permission from the bankruptcy court to conduct a customer vote.

US bankruptcy judge Martin Glenn said on Monday he would allow Celsius to begin sending ballots and other voting materials to account holders explaining the company’s repayment plan for customers in plain language. Cryptocurrency lenders will start sending votes to account holders once approval is received.

Celsius is proposing a fresh start under the leadership of investment firm Arrington Capital, part of the Fahrenheit LLC consortium that acquired the lending platform’s assets in a bankruptcy auction earlier this year.

According to court documents, the client will receive some of the profits through equity in the new company. The new company will run Celsius mining operations and take over institutional loans, private equity, and venture capital, and $500 million invested in “liquid crypto”.

Celsius attorney Chris Koenig told the hearing that the company is on track to begin paying its creditors by the end of 2023. Some customers are still opposing celsius’ repayment plan and could be challenged by other creditors. The court is expected to consider approving the project in October.

Per previous news, bankrupt crypto lending platform plans to close the app within 90 days and distribute liquid cryptocurrencies, including Bitcoin and Ethereum, to qualified creditors, with an estimated distribution amount estimated at $2.03 billion.

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