Celsius Network is undergoing bankruptcy proceedings, aiming to transform into a community-driven $BTC miner. ⛏️
They announced plans to repay users, whose funds have been locked since June 2022, by year’s end. Bloomberg revealed that post-Chapter 11, the company will receive a $450 million financial boost.
Fahrenheit LLC, led by Arrington Capital, will manage the mining operations. Their significant investment underscores their trust in Celsius’s potential.
Judge Martin Glenn is considering Celsius’s proposal amidst objections from users unable to access their assets. Additionally, Lantern Ventures, owed about $82 million, argues that the new venture’s valuation is inflated. If approved, this would mark a first in reviving a crypto entity post-financial collapse under Chapter 11. However, failure could lead to liquidation, reducing user repayments. 🎈
Celsius plans to offset debts by distributing $2 billion in $ETH and $BTC and offering shares in the new entity. Users will also benefit from legal actions against former CEO Alex Mashinsky, who is facing fraud allegations.
Mashinsky, who resigned, blames market upheavals for Celsius’s issues, including the Luna and TerraUSD crash in May 2022.
An independent review found that Celsius used user assets for operational costs since 2020. Interim CEO, Chris Ferraro, will soon advocate for the bankruptcy plan. The outcome will influence Celsius’s future and provide insights into the revival of struggling crypto platforms under Chapter 11. 🤷