The troubled cryptocurrency lender, Celsius Network, recently notified a judge of their plans to initiate repayments to customers before the year’s end. This crucial update was shared during an important hearing on Oct 2 as they sought approval for their reorganization plan.
During the confirmation hearing in New York, Christopher Koenig, the legal representative of Celsius Network, made an opening statement. He mentioned that a new entity known as “NewCo” would arise from the proceedings with substantial initial funding of $450 million.
In a filing dated Sept 29, Celsius Network announced its plan to repay creditors partially. This repayment will be accomplished by utilizing a combination of $2.03 billion in Bitcoin and Ether and shares in the newly formed company.
NewCo has garnered support from a group of companies called Fahrenheit LLC. This consortium will take charge of overseeing the mining and staking business operations.
Celsius Plan Awaits Regulatory Clearance Amid Creditor Challenges
Judge Martin Glenn, overseeing the case, currently contemplates whether to approve Celsius’s restructuring proposal. Securities regulators must also give their clearance for the plan. Although it received a significant majority of favorable votes, reports suggest that certain creditors are presenting challenges.
During the confirmation hearing, Celsius made a statement in their filing. They emphasize that they have devised a plan that has garnered support from over 95% of voting Account Holders, both in terms of quantity and monetary value.
If the Celsius plan receives approval, it will signify a significant event: the revival of a failed cryptocurrency platform from 2022 through a Chapter 11 bankruptcy proceeding.
The restoration of their investments has been eagerly anticipated by Celsius customers ever since June 2022. During that time, the company had to suspend withdrawals due to the downfall of the Terra ecosystem.
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