Celsius is starting to see the light at the end of its bankruptcy tunnel.

Celsius bankruptcy creditors have overwhelmingly approved a reorganization plan. The plan involves both the return of funds to creditors and equity distribution in a new entity.

On September 25th, bankruptcy firm Stretto reported that more than 98% of creditors voted in favor of the reorganization plan.

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However, for the plan to move forward, it still requires the green light from the United States Bankruptcy Court for the Southern District of New York. A confirmation hearing is scheduled for October 2nd.

According to an August 17th disclosure statement, the approved plan involves redistributing approximately $2 billion in Bitcoin (BTC) and Ether (ETH) back to the creditors of the defunct crypto lending firm Celsius Network. In addition to fund redistribution, creditors will also receive equity in a new, yet-to-be-named company, often called “NewCo.”

The management of NewCo will be in the hands of the Fahrenheit Group. This consortium includes key figures in the crypto industry, such as former Algorand CEO Steven Kokinos, Arrington Capital, US Bitcoin Corp, Proof Group Capital Management, and Arrington Capital advisor Ravi Kaza. Based on the disclosure statement:

NewCo will operate and further build out the Debtors’ Bitcoin mining operations, stake Ethereum, monetize the Debtors’ other illiquid assets, and develop new, value-accretive, regulatory-compliant business opportunities.

Celsius Network found itself in dire straits as one of the first significant victims of the 2022 cryptocurrency bear market, leading to its bankruptcy filing on July 14th, 2022.

Further complicating the situation, a year later, the US Securities and Exchange Commission (SEC) initiated legal action against both Celsius and its then-CEO Alex Mashinsky over allegations of unregistered and fraudulent offers related to “crypto asset securities.” Mashinsky was arrested on the same day on multiple charges, including fraudulent financial activity and misleading investors.

The near-unanimous creditor support for the reorganization plan is a significant milestone in the Celsius bankruptcy case. While awaiting judicial confirmation, the plan outlines the road ahead for fund recovery and creating a new company to manage crypto assets.

Gile is a Market Sentiment Analyst who understands what public events may form what emotions. Her experience researching Web3 news and public market messages – including cryptocurrency news reports, PRs, and social network streams – is critical to her role in helping lead the Crypto News Editorial Team.
As an intelligent professional in public relations, together with the team, she aims to determine real VS fake news patterns, and bring her findings to anyone searching for unbiased news and events happening in the FinTech markets. Her expertise is uncovering the latest trustworthy & informative Web3 announcements to the masses.
When she’s not researching the trustworthiness of mainstream stories, she spends time enjoying her terrace view and taking meticulous care of her outdoor environment.

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