According to Coincu, Celsius, a failed crypto lender, plans to repay $2 billion worth of Bitcoin and Ethereum to creditors starting next year. The company aims to transform into a creditor-owned Bitcoin mining firm, despite facing fraud allegations. Former CEO Alex Mashinsky has been accused of manipulating the CEL token and making misleading statements to attract customer investments, but he has pleaded not guilty.
The plan to repay customers whose accounts have been frozen for over a year involves a combination of cryptoassets and stock in the new publicly listed Bitcoin mining company. However, Celsius still needs approval from the US Securities and Exchange Commission (SEC) for this plan. If the crypto mining proposal falls through, the company may have to pivot to liquidation.
Judge Martin Glenn, who approved Celsius' plan, has urged the SEC to expedite its decision on whether to approve the company's emergence from Chapter 11 as a publicly listed Bitcoin mining firm. The court ruling followed a trial where customers expressed frustration with the bankruptcy plan and questioned the new management team. Some customers argued that the plan undervalues the CEL token, which will be used to distribute digital assets and stock to creditors.
Celsius' bankruptcy lawyers argued that the CEL token was essentially worthless when the company filed for Chapter 11 bankruptcy, stating that it served as a proxy for company stock. The bankruptcy plan helped avoid a ruling on whether CEL constitutes a security, which has broader implications for the regulation of the crypto industry in the US.
