Celsius, a defunct crypto lender, has submitted a revised bankruptcy filing as it awaits approval from a New York bankruptcy court after reaching an acquisition deal with Fahrenheit. The reorganization plan, filed on June 15, states that Celsius will sell all altcoins from customers, except those held in Custody and Withhold accounts, and convert them into Bitcoin and Ether starting from July 1.
The revised plan proposes treating “Retail Borrow Claims” through a “Set Off Treatment,” which involves comparing losses against profits in a given year. However, this restructuring proposal may face opposition from borrowers who demand repayment of loans while Celsius has no intention of fulfilling contractual obligations, such as returning collateral.
Celsius has also sought permission to appoint Chris Ferraro as the foreign representative to protect its assets in the United Kingdom under the English Court’s Cross Border Insolvency Regulations (CBIR). This would recognize the United States Chapter 11 as the “foreign main proceedings” for a global resolution.
The Fahrenheit consortium, consisting of venture capital firm Arrington Capital and miner US Bitcoin Corp, won the bid to acquire Celsius assets. The estimated value of Celsius assets was around $2 billion at the time. Under the new deal, the new company is expected to receive approximately $450-500 million worth of liquid cryptocurrency, while US Bitcoin Corp plans to construct a 100-megawatt Bitcoin mining plant.
Celsius suspended withdrawals on June 13, 2022, after facing challenges due to bad investments and the wider impact of the crypto market.
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