Ethereum

Celsius

Shift

Bitcoin

Read

Celsius Network, the embattled cryptocurrency lender, has received court approval for a revised <a href="https://coingape.com/what-celsius-is-doing-to-prevent-bankruptcy/" rel="noopener noreferrer nofollow">bankruptcy exit plan</a>. This new strategy pivots from its initial arrangement with the Fahrenheit consortium, focusing instead on establishing a standalone Bitcoin mining enterprise. The decision, sanctioned by Judge Martin Glenn on December 27, follows the United States Securities and Exchange Commission’s (SEC) rejection of the earlier proposed deal involving the creation of NewCo, a diverse business entity managed by the Fahrenheit consortium.
<h2 id="strong-shift-in-exit-strategy-due-to-regulatory-hurdles-strong">Shift in Exit Strategy Due to Regulatory Hurdles</h2>
The initial exit plan, which envisioned the formation of NewCo to expand Celsius’ mining and business operations under <a href="https://coingape.com/fahrenheit-wins-celsius-network-bid-new-company/" rel="noopener noreferrer nofollow">Fahrenheit consortium</a>‘s management, hit a roadblock with the SEC’s refusal to grant necessary approvals. This consortium included prominent crypto entities like Proof Group, Arrington Capital, and Hut 8. However, with the SEC’s denial, Celsius, backed by its creditors, opted for an alternative route previously agreed upon – transitioning towards a public company solely focused on Bitcoin mining.
This change in strategy is significant as it implies a narrower focus for the company’s future endeavors. The creation of this Bitcoin-centric firm marks a distinct move away from the diverse business model proposed earlier. Creditors are set to receive part of their recovery through shares in the upcoming Bitcoin mining entity. Moreover, this<a href="https://cases.stretto.com/public/x191/11749/PLEADINGS/1174912272380000000115.pdf" rel="noopener noreferrer nofollow"> new direction allows</a> the release of $225 million in crypto assets, initially earmarked for the now-rejected business ventures.
<h2 id="b-implications-for-creditors-and-the-future-of-celsius-b">Implications for Creditors and the Future of Celsius</h2>
Under the new plan, approximately $2 billion in Bitcoin and Ethereum will be redistributed to the creditors of Celsius. This decision is a crucial aspect of the company’s strategy to address the financial claims of those affected by its bankruptcy. The plan’s approval came despite some creditors and the U.S. Department of Justice’s bankruptcy watchdog advocating for a re-vote on the proposal. However, Judge Glenn determined that this new restructuring strategy falls within the terms of the previously confirmed plan and does not adversely affect the creditors’ interests.
The move to focus solely on Bitcoin mining indicates a strategic pivot for Celsius, reflecting the company’s adaptation to regulatory challenges and market conditions. This strategy also highlights the evolving landscape of cryptocurrency businesses, where adaptability and compliance with regulatory standards are becoming increasingly crucial.
Celsius Network’s<a href="https://coingape.com/is-celsius-next-to-file-bankruptcy-after-voyager-three-arrows/" rel="noopener noreferrer nofollow"> bankruptcy filing</a> in July 2022 marked a significant downturn for the company, which was once a prominent player in crypto lending. The arrest of its former CEO, <a href="https://coingape.com/alex-mashinsky-arrested-as-us-sec-doj-cftc-filed-lawsuit-against-celsius-network/" rel="noopener noreferrer nofollow">Alex Mashinsky</a>, in July 2023 on charges of securities fraud, commodities fraud, and wire fraud, further complicated the company’s situation. The new exit strategy represents a critical step in Celsius’ efforts to navigate its financial difficulties and reestablish itself in the cryptocurrency industry.
Read Also: <a href="https://coingape.com/coinbase-restricts-trading-leverage-to-enhance-stability/" rel="noopener noreferrer nofollow">Coinbase Restricts Trading Leverage to Enhance Stability</a>
The post <a href="https://coingape.com/judge-approves-celsius-networks-shift-to-bitcoin-mining-company/" rel="noopener noreferrer nofollow">Judge Approves Celsius Network’s Shift to Bitcoin Mining Company</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

Judge Approves Celsius Network’s Shift to Bitcoin Mining Company

Table of Contents

Coingape News Media

Other articles published on Dec 28, 2023

24 Crypto Update, 27: BTC Steady, ETH Unleashes Unstoppable Momentum

Cryptocurrency-Friendly Congressman to Introduce Bill to Fire SEC Chair Gary Gensler

Bitcoin SV (BSV) Price Hits 20-Month High, Surging 66% Amidst South Korean Trading Frenzy

Spot BTC ETF May Reach $3 Billion in Initial Post-Launch Days, Trading Broker Says + More News

Analyst JD’s Insights on XRP’s Market Cycle and Potential Uptrend

Manta Network’s New Paradigm event surpasses $380M in TVL

Join our free newsletter for daily crypto updates!