Celsius plans to restart cryptocurrency platform with initial financing of up to $450 million

Celsius plans to restart cryptocurrency platform with initial financing of up to $450 million

Celsius CEL/USD, the potential successor to the defunct cryptocurrency lender, revealed its plans to restart the business without any secured debt and with an initial financing of up to $450 million in cryptocurrency, based on court approval.

This information was disclosed in a recent document submission before a confirmation session scheduled for Monday.

In a recent New York bankruptcy hearing, NewCo announced its plan to commence reimbursement to clients with assets locked after Celsius's downfall in June 2022.

This move was seen as the most favorable recovery strategy for the affected clients, according to Bloomberg.

The development comes as the crypto industry anticipates the discussions at Benzinga's Future of Digital Assets conference on Nov. 14, which is expected to shed light on the evolving landscape of digital currencies and related businesses.

Fahrenheit also said it would contribute up to $50 million for an equity position in the rejuvenated venture.

The compensation forFahrenheit's leadership team would be in the form of NewCo's ordinary shares.

Fahrenheit has successfully bid to acquire Celsius's assets, with Arrington Capital at the forefront.

NewCo has aspirations to be traded publicly on Nasdaq to enhance liquidity.

Judge Martin Glenn was evaluating the viability of NewCo's restructuring proposal, which also required the green light from securities authorities. A significant majority, over 98% of the debtors affected by Celsius's bankruptcy, endorsed the plan last month, according to official records.

The plan has its critics.

A Lantern Ventures subsidiary, claiming a debt of $82 million, maintained the valuation of the new enterprise by Celsius's consultants is inflated, Bloomberg reported.

Should the court give its nod to Celsius's proposal, it would set a precedent as the inaugural revival of a cryptocurrency platform post-bankruptcy, especially after the crypto sector witnessed multiple insolvencies the previous year.

However, a rejection of the plan may push Celsius towards liquidation, potentially diminishing the recovery amounts for the creditors.

In July of that year, Celsius sought bankruptcy protection, burdened by massive debts to its investors during a widespread cryptocurrency market collapse.

Documentation from August 2022 revealed a colossal $2.8 billion discrepancy between the company's current cryptocurrency assets and its debts.

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