98% of creditors affected by the bankruptcy of Celsius supported the reorganization plan of the cryptolending platform, according to which they would return part of the assets and receive a stake in the new company.
Under the proposal, debtors will distribute $2 billion worth of Bitcoin and Ethereum. Celsius will also create a new public company called NewCo and transfer its shares to creditors.
The adoption of the initiative marks the final stage in the platform’s bankruptcy process. According to its results, clients can expect a return of 67-85% of funds.
“NewCo will manage Bitcoin mining operations, [которыми ранее занималась Celsius]participate in Ethereum staking, monetize other illiquid assets of the debtors, and develop new, profit-enhancing and regulatory-compliant business opportunities,” the statement said.
The Fahrenheit Group consortium has been appointed as the manager of the new company. In May, the organization became the winner of the tender for the assets of a bankrupt crypto lending platform.
Fahrenheit was formed by venture capital firms Arrington Capital and Proof Group, mining company US Bitcoin Corp, as well as individual investors represented by ex-head of Algorand Stephen Kokinos and Ravi Kaz.
As part of the five-year agreement, Fahrenheit’s annual compensation will be $20 million. US Bitcoin will share $15 million for managing the mining business.
The company will gain control of 121,800 ASIC miners. After connecting devices to the network, the company’s total hashrate will reach approximately 12.2 EH/s.
Celsius acting CEO Chris Ferraro said the company remains focused “on creating the best possible outcome” for everyone involved and returning assets “as quickly as possible.”
As a reminder, in June 2022, Celsius suspended withdrawals, exchanges, and transfers between accounts “due to extreme market conditions.”
After filing for bankruptcy, the company reported a “hole” in its balance sheet of $1.2 billion. In August, it became known that the company’s liabilities exceeded its assets by $2.85 billion.
In September, the head of the platform, Alex Mashinsky, left his post as CEO. In early 2023, the New York Attorney General’s Office accused him of defrauding investors “of billions of dollars.”
On July 13, the US Department of Justice brought seven criminal charges against the former head of Celsius. These include securities fraud, manipulation of the price of the CEL token, and misleading investors.
The US Federal Trade Commission later announced a settlement of claims against the company. The agreement provides for payment by the platform of $4.7 billion.
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