Celsius, the bankrupt crypto lending firm, plans to exit bankruptcy

Celsius, the bankrupt crypto lending firm, plans to exit bankruptcy

Celsius, the bankrupt crypto lending firm, has found a way to finance its proposed relaunch, according to reports from Bloomberg.

Celsius's lawyer, Christopher S. Koenig, said in bankruptcy proceedings that the company intends to exit bankruptcy with $450 million in seed funding.

The money will come fromFahrenheit LLC, a group of companies that is otherwise heavily involved in Celsius' bankruptcy case. Fahrenheit won the bidding process for Celsius' assets in May 2023, and voting on that asset sale took place in August.

The revived version of Celsius is reportedly operating as a user-owned Bitcoin miner, leaving the fate of the company's once-central lending business uncertain.

If Celsius's revival plan is successful, it could be able to compensate customers and creditors more effectively. Although Celsius expects to distribute $2 billion of cryptocurrency this year, it also intends to give creditors a share of the new company - plus stake in disputes against former Celsius CEO Alex Mashinksy and other executives.

The company has reached various related settlements since June, and the target date has been in place since June.

When Bloomberg reported that Celsius aimed to relaunch its business in August, the company began to poll customers on that course of action. On Sept. 26, Celsius said that 95% of customers voted to accept the recovery plan.

Bloomberg's latest report suggests that some parties remain in opposition: one creditor, which is owed $85 million, says advisers have overvalued the new firm.

It should also be noted that Celsius and its customers cannot act alone. The plan will ultimately have to be approved by SEC regulators and the bankruptcy judge.

Plan for Celsius' reopening was originally planned in September, as former Algorand CEO Steven Kokinos joined the revival company as CEO and as Arrington Capital CEO and TechCrunch founder Michael Arrington resigned from the board.