Creditors of the network have voted overwhelmingly in favor of a Celsius reorganization plan that promises the return of approximately $2 billion worth of Bitcoin and Ethereum. This vote signals a significant step forward in the resolution of the Celsius bankruptcy case.
Unprecedented Support for Reorganization Plan and Final Approval
The consensus among creditors is resounding. This is with the majority of classes voting in favor of the plan by an impressive margin of over 98% according to a filing from Stretto. This unprecedented level of support underscores the significance of the proposed measures.
The resounding vote in favor of the plan is a positive development. However, it is important to note that final approval is still pending. The plan will undergo scrutiny at a confirmation hearing scheduled for Oct. 2 in the United States Bankruptcy Court for the Southern District of New York.
The heart of the reorganization plan, as disclosed on Aug. 17, is a comprehensive strategy to restore trust and fairly redistribute assets among Celsius Network creditors. The plan aims to return approximately $2 billion worth of Bitcoin and Ether to the rightful owners. Also, this will be done while introducing a new corporate entity.
Meet “NewCo” – A Promising Venture
Under the proposed plan, the newly formed company, temporarily referred to as “NewCo,” will play a pivotal role in this restructuring. Its mission is multifaceted. It will involve the operation and expansion of the Debtors’ Bitcoin mining operations, Ethereum staking, monetization of illiquid assets, and the development of new, value-enhancing, and regulatory-compliant business opportunities.
The management of “NewCo” is set to be entrusted to the Fahrenheit Group. This is a consortium of respected crypto-native individuals and organizations. Notable figures in this consortium include former Algorand CEO Steven Kokinos, venture capital firm Arrington Capital, crypto miner US Bitcoin Corp, Proof Group Capital Management, and Arrington Capital adviser Ravi Kaza.
A Remarkable Turn of Events for Celsius
Celsius Network’s journey has been marked by turbulence, with the company succumbing to the pressures of the 2022 bear market. The bankruptcy filing on July 14, 2022, signaled a challenging period for the crypto lender.
Legal Challenges and Leadership Turmoil
Even more dramatically, on July 13, 2023, the U.S. Securities and Exchange Commission (SEC) took legal action against Celsius and its former CEO, Alex Mashinsky. The SEC further alleged that Celsius had raised billions of dollars through unregistered and fraudulent offers involving “crypto asset securities.”
Mashinsky’s subsequent arrest, based on an indictment by the U.S. Department of Justice, added further complexity to the situation. He also faced charges related to fraudulent financial activities, misleading investors, and a range of other serious accusations.
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