Celsius Network is revamping into a Bitcoin mining company, promising customer repayments and an exit from bankruptcy.
Cryptocurrency lending platform Celsius Network has secured court approval to transition into a Bitcoin mining company owned by its creditors. This development is part of a comprehensive strategy to compensate account holders whose funds have been inaccessible for over a year.
The confirmation of this strategy was announced by U.S. Bankruptcy Court in the Southern District of New York on Thursday. The approval signals a turning point for the company following its financial collapse last year. According to representatives for Celsius, the platform may commence asset distribution by early next year.
Celsius exiting Chapter 11 bankruptcy
The company’s restructuring strategy, which garnered significant backing from its creditors, presents an exit from Chapter 11 bankruptcy. This comes despite prior accusations of misconduct directed at certain former company officials.
However, the proposed shift to Bitcoin mining operations has been met with a degree of skepticism by some of its customers, and it still needs to clear regulatory challenges. Celsius has indicated the necessity for approval from the SEC, noting that should the mining venture not proceed, an alternative plan for liquidation might be enacted.
The presiding judge in the case has called upon the SEC for an expedited decision regarding Celsius’s intention to re-establish itself as a publicly-traded Bitcoin mining entity.
The court’s affirmation of Celsius’s exit plan brings closure to a trial spanning several weeks, during which customers scrutinized the firm’s new management and aired grievances over both the proposed bankruptcy plan and the inherent costs of the Chapter 11 process. A point of contention remains the perceived undervaluation of the Celsius CEL token, which is pivotal in the distribution of digital assets and shares in the forthcoming Bitcoin mining venture to the company’s creditors.