Doubts Over Celsius’s Mining Business Claims Arise, CelsiusUCC Update on Restructuring Talks

Crypto Regulation
Doubts Over Celsius’s Mining Business Claims Arise, CelsiusUCC Update on Restructuring Talks

Emerging reports indicate that soon after its downfall, Celsius spent around $40 million on its mining operations. When meeting with Celsius creditors, Finance Chief Chris Ferraro recently said that the company went big in crypto mining after its downfall. The finance chief highlighted that the amounts covered expenses tied to mining, including electricity bills. Celsius is using the mining argument to postpone their liquidation. But, creditors have been questioning the economics of mining.

Doubts Over Celsius Mining Business Claims Arise

Dr. Nicholas Weaver recently sent an open letter expressing doubts about Celsius’s claims to restructure into a mining company. Dr. Nicholas said; 

“I hold no cryptocurrencies and do not have any economic interest in the Celsius bankruptcy proceedings. However, I can’t stand idly by when there appears to be a significant deception being perpetrated on the court by the management of Celsius. The cryptocurrency lending/borrowing side is insolvent and quite possibly an explicit Ponzi scheme (and certainly an investor in major and obvious Ponzi schemes like the Anchor Protocol).

Dr. Nicholas added; 

“In an attempt to postpone liquidation, Celsius has tried to claim to the court that their cryptocurrency mining business has the potential to be substantially profitable. Unfortunately, Celsius’s own filings and basic economic analysis of the crypto mining space shows this, at best, to be wishful thinking. And at worst, a fraud on the court.”

This honest assessment from a person neutral on the matter indicates that Celsius’s calls for liquidation postponement have no merit.

CelsiusUCC Update as Others Cast Doubt Over Committee’s Demeanor

Over the weekend, the Celsius Official Committee of Unsecured Creditors (CelsiusUCC) released several tweets on potential proposals offered by the Celsius network and their stand on the proposals. CelsiusUCC said that they had not reached any agreement with @CelsiusNetwork on “restructuring or other resolution of the chapter 11 cases.”

CelsiusUCC must consider the available restructuring options from whatever party, in whatever form, to offer maximum value for its unsecured creditors and account holders. CelsiusUCC noted that it will ensure unsecured creditors and account holders don’t need to rely “on @CelsiusNetwork to engage with potential plan sponsors, acquirers, or other investors.”

CelsiusUCC provides feedback to interested parties enabling them to engage and push Celsius to consider all available restructuring alternatives. 

Even after CelsiusUCC tweets, some interested parties still insist that there are no positive moves from the UCC committee. One party called Keith Suckno said; 

“Doesn’t sound like much information will come from @CelsiusNetwork next hearing, but for all users it would be good to see some positive moves/demeanor from the @CelsiusUcc. So far the only thing that all creditor classes agree on is the weakness of the UCC/Committee #Celsius.”

Creditors and CEL Holders Battle

While creditors are constantly following up on Celsius liquidation proceedings, others complain that CEL token holders who didn’t lose any money from the company’s downfall still demand compensation. For instance, a crypto account @C_Researchers recently said

“The irony of the #CelsiusNetwork saga is that the only group that has not lost their crypto are CEL holders. Still this particular group is demanding to receive equity compensation at the same time as the real victims. CEL is not part of the credit, CEL holders are not creditors.”

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