- The proposal filed proposed allocating $450 million to start up a new company.
- Dubbed NewCo, it will concentrate on Bitcoin mining and staking.
After a judge in Delaware bankruptcy court accepted Celsius Network’s customer payback plan on Thursday, the defunct crypto lending firm is on pace to emerge from bankruptcy.
The proposal, filed with the bankruptcy court on October 2, proposed allocating $450 million to start up a new company. Dubbed NewCo, it will concentrate on Bitcoin mining and staking while being controlled by Celsius’ once-rejected customers and creditors.
Former CEO and co-founder Alex Mashinsky lost control of Celsius after cryptocurrency prices plummeted last summer, joining several other prominent cryptocurrency companies. The bankrupt corporation was managing $25 billion in assets in October of 2021.
Maximizing Liquidity for Creditors
Following the Fahrenheit Group’s successful attempt to acquire Celsius in May, the consortium will now serve as the company’s management. According to the document, NewCo intends to maximize liquidity for creditors by going public and listing on the Nasdaq.
Creditors are set to get “at least $2.03 billion” in crypto under the terms of the agreed arrangement. After more than a year of having no access to their funds or cryptocurrency, consumers of Celsius have been told by their solicitors that they may get refunds in early 2024.
For his actions as CEO of Celsius, Mashinsky was slammed with criminal and civil accusations in July. Authorities from the U.S DOJ, the SEC, the CFTC, and the FTC all initiated proceedings.
Mashinsky was detained and charged with fraud by federal authorities, who say that he and Roni Cohen-Pavon, the company’s Chief Revenue Officer, conspired to artificially raise the price of Celsius’ native cryptocurrency, CEL.
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