The Celsius Network lending platform, currently undergoing bankruptcy proceedings after restructuring, will focus solely on cryptocurrency mining. This will be possible if the amended plan is approved by the SEC amended plan.
The new proposal is transition away from an earlier proposal, which also contemplated the establishment of a staking program.
Under it, the debtors were to distribute Bitcoin and Ethereum worth $2 billion. Celsius would also create a mining company and transfer its shares to creditors. Clients could expect to recover 67-85% of their funds.
The new initiative arose after the SEC gave feedback ‘on some aspects of the plan.’ According to CoinDesk, the proposal required clarifications regarding the platform’s assets.
In May 2023, the Fahrenheit Group consortium was appointed as the administrator. The organization became the winner of the company’s asset auction. Celsius’s successor planned to list on Nasdaq.
“In the coming weeks, the debtors intend to file a motion with the court seeking approval of amendments to the plan reflecting the new deal for the mining company. They doubt that the adjustments will require a reconsideration. The debtors still expect that payments to creditors will begin in January 2024,” — the document says.
The SEC’s feedback led Celsius to pursue registering the shares of a new publicly traded Bitcoin mining company owned by customers.
According to crypto media, mining the first cryptocurrency was the core business of the proposed new firm. The Commission’s feedback likely led stakeholders to conclude that certain assets that were to be transferred to Fahrenheit Holdings will now be transferred for regulatory reasons. They will be held for governance and monetisation […] in the creditors’ interests.
In September 2022, the platform’s chief executive, Alex Mashinsky left the post of CEO. In early 2023, the New York attorney general charged him with deceiving investors out of billions of dollars.
On July 13, the U.S. Department of Justice filed seven criminal charges against the former Celsius head. Among them: securities fraud, manipulation of the CEL token’s price and misleading investors.
Subsequently, the U.S. Federal Trade Commission announced settling claims against the company. The agreement provides for the platform to pay $4.7 billion.