According to Bloomberg sources, the court has approved Celsius Network to resume its business operations. However, there’s a significant twist. Instead of lending out cryptocurrencies as it did before, Celsius is transforming itself into a Bitcoin (BTC) mining company owned by its creditors.
“The new company will operate and expand Bitcoin mining operations, stake Ethereum, liquidate other outstanding assets of the debtor, and explore new business opportunities to create value.”
As part of its recovery plan, Celsius will compensate users whose assets were frozen on the platform. These affected users will receive both cryptocurrencies and shares in the new company. The distribution of these assets is expected to begin in early 2024.
Additionally, court documents reveal that Celsius will distribute its CEL token at a price of $0.25 per token. It’s worth noting that many customers and creditors had opposed the CEL token distribution plan due to its reduced value. However, Celsius and the creditor committee supported this plan. Ultimately, US Bankruptcy Judge Martin Glenn ruled that distributing CEL tokens is reasonable.
While the plan has been approved in bankruptcy court, it also requires approval from the US Securities and Exchange Commission (SEC). Without SEC approval, Celsius may need to liquidate its assets. Judge Glenn has urged the SEC to make a prompt decision.
Celsius, a cryptocurrency lending platform, filed for bankruptcy in July 2022 amid a liquidity crisis affecting various cryptocurrency companies. At the time, Celsius stated that it would soon emerge from bankruptcy and had plans to continue operating throughout the restructuring process, despite temporary withdrawal suspensions.