• Celsius Network reportedly received permission from US Judge Martin Glenn to send a restructured bankruptcy plan to creditors seeking their approval.
• Affected customers could retrieve up to 67% of their funds through a return of liquid digital currencies such as bitcoin.
• If accepted, the amended plan will enable most clients with interest-bearing Earn accounts to get control of Fahrenheit Group and equity shares in the new entity.
Celsius Network Gets Bankruptcy Plan Approval
The now defunct cryptocurrency lending company Celsius Network has reportedly received permission from US Judge Martin Glenn to send a restructured bankruptcy plan to its creditors. The proposal seeks their approval and if granted, it would allow affected customers to retrieve up to 67% of their funds through a return of liquid digital currencies like Bitcoin.
Fahrenheit Group Involved
Under the new arrangement, most clients with interest-bearing Earn accounts would also gain control of the Fahrenheit Group, which is comprised of US Bitcoin Corp., Arrington Capital and other entities. As part of the deal, Fahrenheit Group is expected to purchase a minority stake in the upcoming business for $50 million and list its stock on Nasdaq so that Celsius clients can sell equity shares too.
Crypto Return & Legal Action
The return for those affected by this restructuring will be funded via liquid cryptocurrencies such as Bitcoin and Ethereum along with any proceeds generated from legal action against former CEO Alex Mashinsky. While some investors may oppose this proposal, an official committee appointed to represent junior creditors shows support for it.
Judge Martin Glenn gave his permission for Celsius Network to introduce an advanced bankruptcy proposal that could potentially grant these benefits for customers while making them owners of a new entity as well. This move comes shortly after many users had complained about losses they encountered when investing in crypto assets through Celsius’ platform due to high volatility rates in recent months.
Though there are some who remain skeptical about using debt restructuring plans during times like these, it seems that this particular bankruptcy proposal holds promise for those who were affected by the closure of Celsius Network’s operations earlier this year. It remains unclear whether or not all creditors will accept this arrangement but at least those represented by junior committees have already given their approval accordinging reports from Reuters news agency