In a recent bankruptcy hearing in New York, Celsius has made a new statement, announcing its intention to partially repay some of the funds owed to customers with assets locked on the platform as of June 2022.
Specifically, Christopher S. Koenig, the lawyer representing Celsius, revealed that the company is in the process of restructuring and is set to receive financial support worth $450 million.
Fahrenheit LLC, led by Arrington Capital, was chosen to manage the mining operations and provide the necessary financial support for the newly formed joint venture. This new entity will require approval from securities regulatory agencies. Therefore, Judge Martin Glenn is currently considering Celsius’s plan, despite opposition from some customers who cannot access their funds.
Additionally, a branch of Lantern Ventures owes approximately $82 million, which is hindering this plan because Celsius’s advisors have valued the new business operations too high.
However, if approved, this plan would be the first case of a failed cryptocurrency platform being revived under Chapter 11 after a series of insolvencies rocked the industry last year. Conversely, in the event of the company’s failure, it may have to face liquidation, potentially resulting in lower returns for customers.
According to reports, Celsius plans to partially repay creditors by distributing around $2 billion worth of Ethereum (ETH) and Bitcoin (BTC) and selling shares in the new company.
Former customers will also receive a share in the lawsuit against co-founder and former CEO Alex Mashinsky and other former executives, who have been federally charged with fraud. Mashinsky, who did not plead guilty, resigned after the company filed for bankruptcy.