Crypto lender Celsius Network cleared to exit bankruptcy
Celsius Network, a crypto lender, has received approval from a US bankruptcy court for a restructuring plan that will return cryptocurrency to customers and establish a new company controlled by Celsius creditors. The reorganized business will be managed by Fahrenheit LLC, a consortium that includes the hedge fund Arrington Capital. It will focus on bitcoin mining and earn “staking” fees by validating blockchain transactions.
Celsius Network, which was once valued at $3 billion, filed for Chapter 11 bankruptcy protection in July 2022, one month after freezing customer accounts to stop withdrawals.
The consortium’s proposed plan received overwhelming support from creditors, with 95% of voters in favor during a recent vote. The confirmed plan outlines a strategic approach, providing the capital, management team, and technology required to establish and operate the new entity as outlined in the bid. This will be implemented pursuant to a Chapter 11 plan.
The key provisions of the plan include a distribution of liquid cryptocurrency to account holders, settlements with various groups, and the creation of a new public, regulatory compliant company that will manage Celsius’ illiquid assets. The new company will be overseen by a newly appointed Board of Directors.
Michael Arrington, Founder of Arrington Capital, said, “This has been a lengthy and complicated process for all involved, but we are happy with the result. I am excited to see Celsius becoming a new version of itself – not something that all companies who failed last year will be able to do.”
Steve Kokinos, proposed CEO of the new entity, said, “Confirmation of the plan by the courts is a major milestone and brings us one step closer to ushering the new entity into its new chapter of growth.”
Arrington Capital, US Bitcoin, Proof Group, Ravi Kaza, and Steve Kokinos joined the Celsius proceedings in 2023 with a commitment to rectify issues for creditors and contribute to a positive outcome for the broader industry.
