In a groundbreaking move, cryptocurrency lender Celsius Network receives the green light from a bankruptcy judge to pivot to Bitcoin mining. The court allows the company to deviate from its approved bankruptcy plan, asserting that creditors and clients won’t face harm from the restructuring.
Celsius Embraces Bitcoin Mining
The approved shift signifies Celsius Network’s departure from certain external bidders, placing US Bitcoin Corp. in charge of the newly structured mining business. The move aligns with the company’s commitment to exploring innovative avenues amid its bankruptcy proceedings.
Court Approval for “MiningCo Transaction”
Celsius Network shared the court’s approval for its “MiningCo transaction” through a tweet, signaling a pivotal step forward in its restructuring plan. This transaction aims to establish a publicly traded Bitcoin mining company, promising enhanced cryptocurrency dividends for account holders after the expected bankruptcy exit in early 2024.
Equity Ownership for Customers in Mining NewCo
Under the proposed plan, Celsius assures its customers equity ownership in Mining NewCo, managed by US Data Mining Group, Inc. This strategic move marks a crucial milestone in Celsius’s Chapter 11 cases, charting a new trajectory for the company.
Celsius’s Revised Bankruptcy Plan and SEC Hurdle
Previously, Celsius faced a setback when the SEC rejected its plan to generate fees from validating cryptocurrency transactions and introducing new business lines. The scaled-back bankruptcy plan, now approved, releases $225 million in cryptocurrency assets originally earmarked for the SEC-denied initiatives.
Celsius’s Bankruptcy Journey
Having filed for Chapter 11 bankruptcy protection in July 2022, Celsius Network anticipates emerging from this phase in early 2024. The transition to Bitcoin mining signifies a strategic pivot for Celsius, aligning with the evolving dynamics of the cryptocurrency landscape.