Oman earmarks $350M for a venture into crypto mining expansion, signaling a strategic shift in the nation's tech and economic landscape.
- Celsius has said it could start repaying customers in January, with many customers ready to receive up to $10 million.
- The company will start functioning as a Bitcoin mining entity from the start of 2024.
Celsius Network Emerges from Bankruptcy
Celsius Network has gained approval from the bankruptcy court for its proposed transformation into a Bitcoin mining firm owned by creditors.
The decision supports Celsius’ plan to settle accounts frozen for over a year by distributing a combination of crypto assets and shares in the publicly listed Bitcoin mining entity.
Despite fraud allegations against former executives, the platform garnered sufficient creditor support for the restructuring.
Judge Glenn has urged the SEC to expedite its decision on Celsius’ emergence from bankruptcy as a Bitcoin mining firm.
The court’s approval concludes a multiweek trial during which individual customers raised concerns about the company’s new management.
Customers argued that the plan undervalues Celsius’ CEL token, which will be used to distribute digital assets and stock in the new Bitcoin miner to creditors.
Celsius’ bankruptcy lawyers asserted that CEL had negligible value when the company filed for Chapter 11 in 2022. They emphasized its role as a proxy for company stock typically erased in bankruptcy proceedings.
The decision came over two weeks after the court found SBF, the founder of another bankrupt crypto giant, guilty.
How Did Celsius Go Down?
In July 2022, Celsius Network, headquartered in New Jersey, sought Chapter 11 protection a month after freezing customer accounts to prevent withdrawals.
Once valued at $3 billion, Celsius marked one of the significant crypto collapses of the previous year.
According to court documents, Celsius grappled with a staggering $1.2 billion deficit, holding $5.5 billion in liabilities against $4.3 billion in assets.
The burden of Celsius’ collapse seems likely to fall on customers, given that the filings reveal that most liabilities, totaling $4.7 billion, represent customer holdings.
Celsius’ bankruptcy adds to a series of high-profile crypto insolvencies.
What’s Next for the Company and Market?
This decision signals a unique convergence of financial restructuring and cryptocurrency mining for the market. This showcases a precedent for distressed crypto platforms to pivot towards alternative revenue streams.
The move could inspire confidence in the resilience and adaptability of the crypto industry amid challenges.
For users, the decision holds implications for the recovery of frozen assets and the value distribution.
However, skepticism among some users and the ongoing regulatory hurdles emphasize the uncertainties ahead.
The success of Celsius’ transition will likely influence user trust in crypto platforms facing financial turmoil, setting a precedent.
Overall, this development underscores the evolving dynamics between traditional bankruptcy proceedings and the emerging landscape of cryptocurrency businesses.
Do you think the company could emerge once again as a top crypto lender?