May 29, 2024
Celsius Seeks Court Approval for Customer Repayments
Latest Cryptocurrency News

Celsius Seeks Court Approval for Customer Repayments

Crypto lender Celsius Network, currently facing challenges, has informed a judge of its intention to initiate customer repayments by the end of the year, as part of its reorganization plan discussed during an October 2 hearing seeking approval.

In his opening remarks during the confirmation hearing held in New York, Celsius’ legal representative, Christopher Koenig, indicated that a new entity referred to as “NewCo” will emerge from the proceedings with $450 million in initial funding.

According to a filing on September 29, Celsius intends to partially compensate its creditors through the use of $2.03 billion in Bitcoin and Ethereum, along with shares in the new company. Judge Martin Glenn, presiding over the case, is currently evaluating whether to endorse Celsius’s restructuring proposal, which will also require clearance from regulatory authorities. Despite receiving overwhelming support from a majority of account holders, both in terms of number and dollar amount, the plan is facing challenges from some creditors, as reported.

“The Debtors arrive at Confirmation with a Plan that has the support of over 95% of voting Account Holders by both number and dollar amount,” Celsius stated in a filing presented during the confirmation hearing.

If the Celsius plan is approved, it would mark one of the first instances of a failed crypto platform from 2022 being revived through a Chapter 11 bankruptcy case.

Celsius customers have been eagerly awaiting restitution since the company suspended withdrawals in June 2022 in the aftermath of the Terra/Luna ecosystem collapse.

Image by macrovector on Freepik

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