Through the ongoing turmoil, Celsius Network LLC is considering issuing a new digital-asset token to repay its creditors. According to the company, this is part of a planned reorganization and bankruptcy as a regulated cryptocurrency platform.
Ross M. Kwasteniet is a company attorney. At a video-court hearing, he stated that reorganizing Celsius into a properly licensed publicly traded firm would attract more money for creditors.
What Has Celsius Been Up To Lately?
As part of a payout plan, Kwasteniet informed New York-based US Bankruptcy Judge Martin Glenn that Celsius had been negotiating with various creditor groups about creating the new business and issuing a new token to creditors.
Another troubled crypto platform has generated digital currency to compensate for client losses. Conversely, Celsius is most likely the first crypto firm to seek to create a new currency. However, the federal judge must authorize this procedure to assist the firm in its bankruptcy filing.
A group of creditors advised Celsius to follow the Bitfinex exchange’s example. Bitfinex gave customers who lost money in a hack new tokens. A Beijing-based company that provides Bitcoin mining pool services said in September that it would distribute coins to users based on the worth of other crypto assets.
How Would the Surprising Reorganization Be Structured?
Creditors, including Celsius customers who hold cryptocurrency on the platform, must vote for any firm reorganization. Before deciding on whether to accept the idea, Glenn would review that vote.
Celsius attempted to sell itself as an operating firm after declaring bankruptcy last year and soliciting bids for its assets. Kwasteniet stated that the bids for particular assets were underwhelming.
Later this week, the corporation will submit documents detailing its intentions in court. A portfolio of loans, other investments, and tens of thousands of cryptocurrency mining machines will form any new corporation. According to a corporate financial adviser, cryptocurrency mining has gotten more lucrative in recent months.
The case is US Bankruptcy Court for the Southern District of New York (Manhattan), 22-10964, Celsius Network LLC.
