March 27, 2024
Celsius, a cryptocurrency lending platform, is nearing a crucial vote to decide on selling its assets as part of its recovery efforts.
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Celsius Cryptocurrency Lender Approaches Crucial Vote to Sell Assets Amid Recovery Prospects

Celsius, the crypto lender facing bankruptcy, is set to conduct a vote on its proposal to offload assets to the Fahrenheit consortium. This decision comes after a judge granted approval for disclosures, indicating that creditors could potentially regain 67% to 85% of their holdings.

This approval signifies a crucial milestone in Celsius’ year-long journey out of insolvency, with the aim of reimbursing customers amidst the backdrop of considerable turmoil in the cryptocurrency markets. Additionally, the arrest of former CEO Alex Mashinsky on fraud charges, which he has refuted, added to the complexity of the situation.

Between August 24 and September 22, creditors will receive ballots to vote on the plan, which calls for the transfer of assets to a group that includes Arrington Capital and the miner U.S. Bitcoin Corp. Returns to creditors, which will mostly be made in bitcoin (BTC) and ether (ETH), could range from 67% for individuals with Earn Accounts to 85.6% for those taking part in Celsius’ Borrow Program, as opposed to just 47% for a liquidation of assets, according to court documents.

The current steward of the company, interim CEO Chris Ferraro, said, “we remain laser focused on creating the best outcome for customers and creditors and returning value as soon as possible.” This is taking place under the framework of Chapter 11, which was initiated in July 2022 and is being overseen by New York Bankruptcy Judge Martin Glenn.

In previous cryptocurrency bankruptcy plans, creditors overwhelmingly approved reorganization proposals. In the case of Voyager, another crypto lender, an overwhelming 97% of creditors favored a sale to Binance.US; however, the buyer subsequently withdrew due to legal complications.

In a separate development, Alex Mashinsky was apprehended in July on charges of securities fraud, commodities fraud, wire fraud, and conspiracy to manipulate the value of Celsius’ token, CEL. Multiple government agencies were involved in bringing these charges. While the company itself evaded prosecution by admitting responsibility and cooperating, a $4.7 billion penalty imposed by the Federal Trade Commission is not expected to impede the company’s intentions to reimburse its customers.

Image by Pixabay

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