Crypto News – A novel plan to return an estimated $2 billion in Bitcoin (BTC) and Ether (ETH) via a new user-owned corporation was proposed on Monday, August 14. The bankrupt cryptocurrency lender obtained court approval to begin surveying Celsius Networks creditors about it.
Celsius Networks Creditors Not Warm to Firm’s Planned $2 Million Refund Strategy
Judge Martin Glenn of the US Bankruptcy Court announced that he would begin delivering ballots to Celsius account holders along with voting materials that explain the company’s objectives for paying back customers in plain language. Judge Glenn, however, stated that he would only grant the approval upon receiving further information about the volatility of the cryptocurrency business from Celsius’ advisors. He also inquires about any challenges that might impact the business’s cryptocurrency mining operations.
What is Celsius Networks’ Repayment Plan?
Under the direction of the investment company Arrington Capital, the insolvent cryptocurrency lender has presented a repayment strategy. The initiative is being led by a group known as Fahrenheit LLC, which earlier this year was successful in purchasing the assets of the cryptocurrency lender during an auction held in the context of bankruptcy. Customers will get a portion of their money back by owning stock in the new company, which will handle Celsius’ mining operations and take on duties including institutional loans and investments, including $500 million in readily available cryptocurrencies.
According to court records, a group representing Celsius account holders and other creditors stated that retail debtors could receive more than 85 cents for every dollar if the Fahrenheit transaction is approved. The new company will be the first publicly-listed business with significant holdings in both Bitcoin and Ethereum. It will have a solid financial foundation and no significant debt. The deal also specifies how creditors will receive crypto tokens worth about $2 billion.
Celsius Creditors Do Not Accept Plan
Holders of Celsius accounts complained about the company’s repayment plan at a hearing. They are apprehensive about getting shares in a brand-new, unproven project. A few clients also want their CEL tokens returned by Celsius. They object to the company’s plan to assign a 25-cent value to each CEL token.
Holders of Celsius accounts won’t receive the CEL tokens, according to Judge Glenn. According to the Securities and Exchange Commission, Celsius and its former CEO viewed CEL tokens as being comparable to equities in a publicly traded firm. CEL coins cannot be distributed, according to Judge Glenn, because they depend on the value of Celsius. Additionally, he stated that Celsius would cease to exist following the resolution of the Chapter 11 bankruptcy case.
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