Bankrupt cryptocurrency lender Celsius has reportedly obtained permission to gather feedback from account holders on how it will transition into a new user-owned company and distribute its assets to customers.
On Aug. 14, United States Bankruptcy Judge Martin Glenn reportedly granted Celsius the green light to distribute voting ballots to account holders. They will also receive supplementary materials aimed at providing a straightforward breakdown of the company’s plan for repaying its debts.
Celsius Insights and the State of the Crypto Industry
According to the Aug. 14 report, Glenn’s approval hinges on the stipulation that the company’s advisors are transparent with its account holders over the volatile nature of the cryptocurrency industry and the potential obstacles that may hamper Celsius’ Bitcoin mining operations.
Since Celsius filed for bankruptcy in July 2022, Bitcoin has undergone significant price swings. It reached a local low point of $15,797 in November 2022 and peaked at $31,454 in July 2023. At the time of writing, it holds a price of $29,366.
On May 25, crypto consortium Fahrenheit won the bid to acquire $2 billion of Celsius’ assets, operating Celsius under the new branding of “NewCo.” Celsius declared that “under the plan, its account holders will own 100% of the new equity in NewCo.”
Acquisition Deals and Plans to Repay Creditors
The voting process will determine how NewCo will distribute the assets and equity to Celsius’ account holders. All in all, the asset distribution will reportedly be worth approximately $2 billion in Bitcoin and Ethereum.
Fahrenheit will also obtain control of the company’s Bitcoin mining and staking operations. According to Celsius’ lawyer Chris Koenig, the company is on track to repay creditors by the end of 2023.
To learn how to build a Bitcoin mining rig, read BeInCrypto’s guide: How To Build a Mining Rig: A Step-by-Step Guide
However, Judge Glenn anticipates it will not be a simple process.“There is still a lot of work that needs to be done,” Glenn said in the hearing.
The plan is set to be reviewed for approval by the court in October.
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