Key takeaways:
- Voting favors a strategy to see money returned to creditors in the Celsius bankruptcy case and allocating stock through a new firm.
- Although the proposal has received nearly overwhelming support from voters, it still needs to be confirmed at a hearing planned for October 2.
Voting in favor of a strategy that will see money returned to creditors in the Celsius bankruptcy case as well as allocating stock through a new firm, the creditors engaged in the Celsius bankruptcy case.
The plan was approved by more than 98% of the classes, according to a filing made on September 25 by the bankruptcy firm Stretto.
Although the proposal has received nearly overwhelming support from voters, it still needs to be confirmed at a hearing planned for October 2 in the Southern District of New York of the United States Bankruptcy Court.
In accordance with the existing plan, creditors of Celsius Network would get almost $2 billion in Bitcoin and Ether, according to a disclosure statement submitted on August 17. Additionally, the plan will distribute stock in a new business that is now known as “NewCo.” It stated:
“NewCo will operate and further build out the Debtors’ Bitcoin mining operations, stake Ethereum, monetize the Debtors’ other illiquid assets, and develop new, value-accretive, regulatory-compliant business opportunities,”
Notably, the new business will be run by the Fahrenheit Group, a group of organizations and people with experience in the cryptocurrency space that includes former Algorand CEO Steven Kokinos, the venture capital firm Arrington Capital, the cryptocurrency miner US Bitcoin Corp, Proof Group Capital Management, and Arrington Capital advisor Ravi Kaza.
On July 14, 2022, the now-defunct crypto lender Celsius Network filed for bankruptcy, becoming one of the first significant victims of the 2022 bear market.
The SEC filed a lawsuit against Celsius and its former CEO Alex Mashinsky on July 13, 2023, alleging that they raised billions of dollars through illegal and dishonest promises involving “crypto asset securities.”
Following a US Department of Justice indictment that accused the former CEO of engaging in fraudulent financial conduct, misleading investors, and several other related offenses, Mashinsky was then detained that same day.
