Celsius will focus only on mining according to its reorganization plan

Celsius will focus only on mining according to its reorganization plan
Celsius will focus only on mining according to its reorganization plan

Cryptocurrency lending company Celsius said its reorganized company will focus solely on Bitcoin mining following the response from the United States Securities and Exchange Commission (SEC).

In a Nov. 20 announcement, Celsius said that the core activity of the company “NewCo” proposed in its restructuring plan will be Bitcoin (BTC) mining rather than staking. The company said it had reached the decision to focus its efforts on mining “based on feedback from the SEC.” [y] in consultation with the Official Committee of Unsecured Creditors”.

As part of the restructuring, Celsius declared that some of its assets, which it had previously proposed transferring to an entity called “Fahrenheit NewCo”, would remain in the hands of the company’s heirs. The company plans to have the “Mining NewCo” entity publicly traded in the United States and owned by Celsius customers.

“In the coming weeks, the Debtors intend to file a motion with the Bankruptcy Court to approve amendments to the Plan to reflect the new Mining NewCo transaction,” Celsius said. “The Debtors do not believe these modifications require a new Plan application. The Debtors still anticipate that distributions to creditors will begin in January 2024.”

Following observations from the Securities and Exchange Commission (SEC), Celsius will begin the transition to a new mining-only company.

Celsius filed for Chapter 11 protection in the United States Bankruptcy Court for the Southern District of New York in July 2022 following a pause in withdrawals on the platform. In July 2023, the SEC filed a lawsuit against Celsius and Alex Mashinsky, alleging that the former CEO falsely promised a safe investment through the firm’s Earn Interest Program.

U.S. Justice Department authorities arrested Mashinsky in July, charging the former Celsius CEO with securities fraud, commodity fraud and wire fraud related to allegedly defrauding clients. At the time of publication, Mashinsky remains free on $40 million bail pending his trial, which is scheduled to begin in September 2024.

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