Court Approves Celsius Bankruptcy Reorganization Plan, Set to Be Implemented by Early 2024

Crypto News- Crypto lender Celsius achieved a significant milestone on Thursday as a bankruptcy court granted approval for its reorganization plan, marking the anticipated completion by early 2024. This marks Celsius’ exit from bankruptcy, initiated in July of the previous year, a process that involved a substantial $4.7 billion settlement with U.S. authorities to resolve fraud allegations.

Court Approves Celsius Bankruptcy Reorganization Plan, Set to Be Implemented by Early 2024

The settlement coincided with the resignation of former CEO Alex Mashinsky in September 2022, who, upon the settlement, faced fraud charges related to the alleged manipulation of the CEL token’s price. Denying the allegations, Mashinsky was released on a $40 million bond, and a court recently ordered a freeze on his banking and real estate assets. His trial is scheduled for September 2024.

Chief Judge Martin Glenn of the United States Southern District of New York Bankruptcy Court confirmed a modified reorganization plan agreed upon in late September. During this period, Celsius’ creditors voted in favor of a plan that would return 67%-85% of holdings to them. Customers with funds tied up in Celsius are expected to receive approximately $0.25 per CEL token. CEL, initially a utility token, derived its value from the utilities it provided on the Celsius Network.

According to reports, Celsius announced its commitment to returning approximately $2 billion in cryptocurrency to account holders.

The court order designates Fahrenheit Holdings, a consortium including Arrington Capital and crypto miner U.S. Bitcoin Corp, with the responsibility of overseeing the reorganization’s implementation. Fahrenheit successfully acquired the insolvent lender in May 2023. As part of the reorganization, a new company, provisionally named NewCo, will be established in Delaware, focusing on mining and staking activities.