Home Business Celsius Network Obtains US Bankruptcy Court Approval for Restructuring

Celsius Network Obtains US Bankruptcy Court Approval for Restructuring

by News7

Celsius Network has secured the approval of the US
bankruptcy court to restructure its business. In the plan, the company has promised to return
crypto assets to customers and outlined a new vision. This
marks an important phase for the crypto lender, which filed for bankruptcy
protection last year.

According to a report by Reuters, Celsius Network
will focus on mining new Bitcoin and earning staking fees by validating blockchain
transactions under the management of Fahrenheit LLC, a consortium
spearheaded by Arrington Capital. Approximately 600,000 Celsius’ clients, who
held an estimated $4.4 billion in interest-bearing accounts, suffered losses
when the company collapsed.

Last year, Celsius filed for bankruptcy protection, freezing customers’ accounts to prevent withdrawals. The
restructuring plan aims to rectify this situation, with Celsius expecting to
emerge from bankruptcy in early 2024. As part of the plan,
Fahrenheit will acquire a minority stake in the reorganized Celsius for $50
million. The new company will be publicly listed on
Nasdaq.

We are pleased to share that, following a successful creditor voting process and Confirmation hearing, the Court confirmed our Plan of Reorganization. https://t.co/bSemZ5f0k8

— Celsius (@CelsiusNetwork) November 10, 2023

Additionally, the restructuring plan has addressed legal matters facing the company. This involves the valuation of Celsius’ proprietary crypto token, CEL, at 25 cents. An examiner appointed by the court had previously raised concerns about the inflation of the token.
Besides that, the reorganized company plans to pursue litigation against
Celsius’ Founder, Alex Mashinsky.

Legal Hurdles Ahead

In September, the Former Chief Revenue Officer of
Celsius, Roni Cohen-Pavon, pleaded guilty in the US District Court for
the Southern District of New York, Finance Magnates reported. The guilty plea
was in response to charges related to a series of fraudulent activities and
price manipulations.

While Cohen-Pavon awaits his sentencing hearing on
December 11, the CEO of Celsius Network, Alex Mashinsky, has pleaded not guilty. Despite Cohen-Pavon’s guilty admission, Mashinsky has contested all the charges against him and is out on a bond of $40 million.

The US authorities
froze some of Mashinsky’s assets, including bank accounts and a property in
Austin, Texas. This move aimed to secure potential restitution for those
affected by the collapse of Celsius. Simultaneously, Mashinsky’s
legal team has challenged the Federal Trade Commission’s case against him, seeking
its dismissal.

Celsius Network has secured the approval of the US
bankruptcy court to restructure its business. In the plan, the company has promised to return
crypto assets to customers and outlined a new vision. This
marks an important phase for the crypto lender, which filed for bankruptcy
protection last year.

According to a report by Reuters, Celsius Network
will focus on mining new Bitcoin and earning staking fees by validating blockchain
transactions under the management of Fahrenheit LLC, a consortium
spearheaded by Arrington Capital. Approximately 600,000 Celsius’ clients, who
held an estimated $4.4 billion in interest-bearing accounts, suffered losses
when the company collapsed.

Last year, Celsius filed for bankruptcy protection, freezing customers’ accounts to prevent withdrawals. The
restructuring plan aims to rectify this situation, with Celsius expecting to
emerge from bankruptcy in early 2024. As part of the plan,
Fahrenheit will acquire a minority stake in the reorganized Celsius for $50
million. The new company will be publicly listed on
Nasdaq.

We are pleased to share that, following a successful creditor voting process and Confirmation hearing, the Court confirmed our Plan of Reorganization. https://t.co/bSemZ5f0k8

— Celsius (@CelsiusNetwork) November 10, 2023

Additionally, the restructuring plan has addressed legal matters facing the company. This involves the valuation of Celsius’ proprietary crypto token, CEL, at 25 cents. An examiner appointed by the court had previously raised concerns about the inflation of the token.
Besides that, the reorganized company plans to pursue litigation against
Celsius’ Founder, Alex Mashinsky.

Legal Hurdles Ahead

In September, the Former Chief Revenue Officer of
Celsius, Roni Cohen-Pavon, pleaded guilty in the US District Court for
the Southern District of New York, Finance Magnates reported. The guilty plea
was in response to charges related to a series of fraudulent activities and
price manipulations.

While Cohen-Pavon awaits his sentencing hearing on
December 11, the CEO of Celsius Network, Alex Mashinsky, has pleaded not guilty. Despite Cohen-Pavon’s guilty admission, Mashinsky has contested all the charges against him and is out on a bond of $40 million.

The US authorities
froze some of Mashinsky’s assets, including bank accounts and a property in
Austin, Texas. This move aimed to secure potential restitution for those
affected by the collapse of Celsius. Simultaneously, Mashinsky’s
legal team has challenged the Federal Trade Commission’s case against him, seeking
its dismissal.

Source : FinanceMagnates

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