Celsius Network to start payments to its customers by end of year

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Celsius Network to start payments to its customers by end of year

Celsius Network, the insolvent crypto lending firm, is looking to begin making payments to its customers by the end of the year, the firm's legal counsel Christopher Koenig said during October 2 bankruptcy court hearing.

As outlined in the filing presented at the confirm hearing, NewCo, a new company with $450 million in seed funding focused on Bitcoin mining and staking, is the key to the proposed reorganization plan.

Although NewCo will be owned by Celsius' customers, it will be managed byFahrenheit, a consortium that won a bid to acquire Celsius Network in May 2023.

The management team will be compensated in NewCo Common Stock to best align the interests of Fahrenheit and creditors who will own NewCo.

Celsius' creditors will also receive about $2 billion of Bitcoin and Ethereum as part of the plan, which was first proposed in August.

To maximize liquidity, NewCo plans to be listed on the Nasdaq stock exchange, enabling creditors to receive equity in a newly formed company.

Celsius Network was a significant player in the cryptocurrency industry before its dramatic collapse in July 2022, boasting a substantial $25 billion in assets under management as of October 2021.

The company enables users to deposit a range of cryptocurrencies and earn interest on their holdings. Users could take out loans with holdings as collateral, leveraging their digital assets for financial flexibility.

While a majority of creditors said their approve of the restructuring plan, some remain opposed to it.

The filing alleges that the U.S. has filed 12 formal objections, including those made by the United States. The trustee and the U.S. Securities and Exchange Commission, as well as 12 informal objection letters and 2 reservation of rights received by the debtors.

The debtors presented each of the oppositions with answers defending their arguments.

Martin Glenn, the presiding judge, has been considering the possibility of the possibility of Celsius Network's restructuring plan. The plan's ultimate success will depend on securing the approval of the U.S. regulatory authorities.

The hearing regarding Celsius's Chapter 11 plan is scheduled to resume on Tuesday.