Bankrupt crypto Lender Celsius Network Has revealed that the company plans to switch to an exclusive bitcoin mining company, following confirmation of the plan by the bankruptcy court.
Celsius Transition to NewCo Mining
Celsius NetworkThe company’s transition to a mining company coincides with its bankruptcy process. Over the past year, the digital asset company experienced financial challenges that led it to file for bankruptcy.
In September, Celsius requested a repayment plan as well as its bankruptcy plan to resolve the company’s financial challenges. This saw more than 95% of Celsius’s creditors vote in favor of this reimbursement plan.
According to a recent court filing, the cryptocurrency company intends to convert its services to bitcoin mining operations exclusively and the new company will be known as Mining NewCo.
Additionally, the company appears to have abandoned its initial plan for the company’s future with Fahrenheit Group. The firm stated that the transition was the core business of the new company that would be formed with Fahrenheit, LLC.
This was the core business of the proposed new company Fahrenheit, LLC described in the Plan (the “Fahrenheit NewCo”).
The new company, which was supposed to be called Fahrenheit NewCo, was formed after Celsius purchased this year after buying Celsius in a bidding war.
Celsius and Fahrenheit Group initially reached an agreement under which the group would provide the company with funding and operational expertise. Fahrenheit successfully acquired the company’s assets this year.
Meanwhile, the company is in contact with certain parties to organize the management of the bitcoin mining company.
The SEC has issued the transition measure
The company’s plan to switch to a bitcoin mining company was triggered by comments from the United States Securities and Exchange Commission (SEC) after the court confirmed its plan. The company also highlighted that the new mining company will be owned by its clients.
The presentation said:
Celsius received comments from the Securities and Exchange Commission (the “SEC”) on certain aspects of the Plan, which has resulted in Celsius now intending to begin the process of applying to register the shares of a new publicly traded bitcoin mining company that will be owned by the clients of Celsius (the “Mining NewCo”).
Additionally, the comments appear to have also communicated the initial plan to transfer the company’s assets to the Fahrenheit Group. As noted in the filing, Celsius Estates will retain some of the assets for the plan administrator to monetize.
However, based on comments from the SEC, the Debtors, in consultation with the Official Committee of Unsecured Creditors (the “Committee”), have determined that certain of the assets that were to be transferred to Fahrenheit NewCo must, for regulatory reasons , be retained by the assets of Celsius to be administered and monetized by the Plan Administrator and/or the Litigation Administrator for the benefit of creditors.
Featured image from Shutterstock, chart from Tradingview.com
