Discover the crypto universe in depth

Crypto Lender Celsius Nearing Resolution of Bankruptcy

The tumultuous journey of crypto lender Celsius through bankruptcy appears to be nearing its end, with resounding support from its creditors. According to documentation filed by restructuring expert Stretto, 67% to 85% of assets are expected to be returned to creditors, an initiative that has garnered an impressive approval of 95% from most classes of claimants. While the plan awaits final approval from the court, it marks a significant milestone in the struggling company’s efforts to resolve its financial woes.

This chapter of Celsius’ story has not been without controversy. Notable objections have arisen, including those from the U.S. trustee. However, the United States Bankruptcy Court for the Southern District of New York is set to hold a decisive confirmation hearing on October 2, having approved the voting process earlier in August 2023. The imminent restructuring will result in the sale of key assets to the crypto consortium Fahrenheit Holdings, which counts Arrington Capital and U.S. Bitcoin Corp among its shareholders. This consortium won their bid to acquire the struggling Celsius network in May 2023.

Celsius’ financial troubles began in July 2022, leading to the resignation of its CEO, Alex Mashinsky, a few months later. In July 2023, Mashinsky found himself behind bars, facing allegations of fraud and manipulation related to the CEL token, allegations which he vehemently denied. Amidst the turmoil, Celsius settled a whopping $4.7 billion with U.S. authorities over these fraud allegations, emphasizing that such settlements would remain separate from the restructuring roadmap. After his arrest, Mashinsky was released on an enormous $40 million bail. However, shortly after, a court order saw his bank and real estate assets placed under seal.

Related Posts