Judge expresses concern over Celsius Network's change in plans
Celsius Network, a cryptocurrency lending platform, may have to secure a fresh vote from creditors for its proposed shift to a Bitcoin mining venture, according to a US bankruptcy judge. The judge expressed displeasure with the abrupt change and highlighted the importance of reaching an agreement with the SEC.
Regulatory guidance prompts Celsius' scaled-down strategy
Celsius recently announced its plan to focus exclusively on Bitcoin mining after emerging from bankruptcy. This decision was influenced by regulatory concerns raised by the US Securities and Exchange Commission (SEC) about Celsius' original business plans. While the SEC did not object to Celsius' bankruptcy plan, the agency was hesitant to endorse crypto lending and staking, activities it had previously disapproved of.
Attorney argues that new vote isn't necessary
Celsius' attorney argued in court that the court-approved bankruptcy plan allowed the company the flexibility to shift to a mining-exclusive business. The attorney claimed that a new vote from creditors is not required as the revised deal is equally beneficial for them. However, two customers expressed dissent in court documents, suggesting that Celsius should undergo complete liquidation instead.
Improved recovery rate for Celsius creditors
The updated Celsius plan, if approved, would release $225 million in cryptocurrency assets from the control of external investors. Under the new proposal, Celsius creditors are projected to receive a 67% recovery, surpassing the previous arrangement. The post-bankruptcy Bitcoin mining venture will be overseen by U.S. Bitcoin Corp, a participant in the consortium alongside Arrington Capital.
