On November 9, Judge Martin Glenn of the Southern District of New York Bankruptcy Court confirmed the plan, which had garnered substantial support from Celsius creditors on September 27.
On November 9, Judge Martin Glenn of the Southern District of New York Bankruptcy Court confirmed the plan, which had garnered substantial support from Celsius creditors on September 27. The approval of the bankruptcy plan for Celsius represents a significant milestone, providing creditors with the opportunity to recover funds and acquire shares in the reorganized entity, referred to as NewCo.
As per the endorsed plan, around $2 billion in Bitcoin and Ethereum will be allocated to Celsius creditors, accompanied by equity in NewCo. The company aims to commence creditor reimbursements by the conclusion of the current year.
A considerable number of creditors were participants in Celsius' Earn program, where they earned weekly rewards by holding locked CEL tokens. Judge Glenn, in his decision, clarified that the confirmation order does not constitute a determination regarding whether CEL Token or the Earn Program qualifies as securities, addressing concerns raised by the U.S. Securities and Exchange Commission (SEC).
Managed by the Fahrenheit consortium, composed of various crypto-native entities, NewCo plans to expand Celsius' previous mining operations, monetize illiquid assets, and engage in other developmental endeavors, subject to regulatory approval. The bankruptcy and restructuring process followed Celsius filing for bankruptcy in July 2022, with its former CEO, Alex Mashinsky, facing charges of securities fraud, commodities fraud, and wire fraud. Mashinsky is scheduled for trial in September 2024, while former Chief Revenue Officer Roni Cohen-Pavon has pleaded guilty to fraud charges and awaits sentencing on December 1.
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