Judge Approves Celsius’ Restructuring Plan to Transition into a Bitcoin Mining Company

Judge Approves Celsius' Restructuring Plan to Transition into a Bitcoin Mining Company

Judge Approves Celsius' Restructuring Plan to Transition into a Bitcoin Mining Company

According to a report from Cointelegraph, court documents submitted on Wednesday (27th) revealed that US bankruptcy court judge Martin Glenn has approved the second bankruptcy exit plan agreed upon by creditors of cryptocurrency lending company Celsius Network. The plan involves the establishment of a publicly traded company dedicated to Bitcoin mining, rather than a company managed by the Fahrenheit consortium involving multiple businesses.

This shift came about because the US Securities and Exchange Commission (SEC) refused to grant the relief required for the implementation of the first plan in the bankruptcy exit, which involved the creation of a new company called “NewCo”. According to the original plan, NewCo would expand Celsius’ existing mining operations and business activities and be managed by the Fahrenheit consortium. The consortium consists of several institutions and investors, including Proof Group, Arrington Capital, and Hut 8.

According to Reuters, some creditors and the US Department of Justice’s bankruptcy oversight agency argued that Celsius should hold a new vote on the proposal. However, Judge Glenn determined that the new restructuring strategy would not have adverse effects on the creditors. According to the new plan, Celsius creditors will receive partial recovery through shares in the soon-to-be-established Bitcoin mining enterprise. Additionally, the plan releases $225 million worth of cryptographic assets that were originally intended to fund the rejected new business by the SEC. As per the previously approved plan, approximately $2 billion worth of Bitcoin (BTC) and Ethereum (ETH) will also be redistributed to Celsius creditors.