Celsius now plans to shift to mining-only company at emergence

By Sarah Lizee

Olympia, Wash., Nov. 21 – Celsius Network LLC announced that it plans to transition to a Bitcoin mining-only company when it emerges from Chapter 11 bankruptcy, according to a Monday evening press release.

As previously reported, the U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan on Nov. 9.

Following confirmation, Celsius received feedback from the Securities and Exchange Commission on some aspects of the plan. Celsius now intends to begin the process to apply to register the shares in a new publicly traded Bitcoin-mining company that will be owned by Celsius customers.

“This was the core business of the new company that was proposed to be created with Fahrenheit, LLC that was described in the plan (the Fahrenheit NewCo),” Celsius said in the release.

“However, based on the SEC’s feedback, the debtors, in consultation with the official committee of unsecured creditors, have determined that certain of the assets that were to be transferred to the Fahrenheit NewCo must, for regulatory reasons, be retained by Celsius’s estates to be administered and monetized by the plan administrator and/or litigation administrator for the benefit of creditors.”

Celsius said it is in discussions with some parties regarding the terms and conditions of the future management of the new company, and more details will be provided as soon as they are available.

Although negotiations are ongoing, due to the reduction in scope and scale of the Mining NewCo when compared to the Fahrenheit NewCo, the debtors expect that the fees and other economic incentives to be paid to the operators of the Mining NewCo will be lower than those associated with the Fahrenheit NewCo, and that the amount of liquid cryptocurrency to be available for distribution directly to customers will be greater now.

In the coming weeks, the debtors intend to file a motion with the bankruptcy court to approve modifications to the plan to reflect the new Mining NewCo transaction.

The debtors do not believe the modifications will require re-solicitation of the plan, and that distributions to creditors will still start in January.

The Hoboken, N.J.-based cryptocurrency lending platform filed bankruptcy on July 13, 2022 under Chapter 11 case number 22-10964.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.