Celsius’ successor will receive $450 million if reorganization is approved

What happened to Celsius?  Everything you need to know
What happened to Celsius?  Everything you need to know

NewCo, which will eventually replace the bankrupt Celsius, will receive $450 million in digital assets and will go public on the Nasdaq stock exchange if the reorganization plan is approved by the court.

During the latest hearings, representatives of NewCo said that they intend to begin paying customers whose funds were frozen on the crypto-lending platform. According to them, this is the “best possible option” for reimbursement.

The Fahrenheit Group consortium has been appointed as manager of the new company. In May, the organization won the tender for the assets of the bankrupt platform.

Fahrenheit also committed to invest $50 million in NewCo. The company will receive dividends in the form of ordinary shares. In addition, the consortium plans to take over Celsius’ institutional business and the company’s mining division.

At the end of September, 98% of creditors affected by Celsius’ bankruptcy supported the reorganization plan. Under the proposal, debtors will distribute $2 billion worth of Bitcoin and Ethereum.

In addition to the judge, the initiative must be approved by the US Securities and Exchange Commission. If the answer is positive, Celsius will become the first company that managed to be revived after a series of bankruptcies in 2022.

If the plan is not approved, the cryptolending service will begin liquidating funds, which will significantly reduce payments to affected investors.

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.

Let us remind you that in September, the head of the platform, Alex Mashinsky, left the post of 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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