According to Reuters, cryptocurrency lender Celsius Network may be required to seek a new creditor vote on its proposed transition to a bitcoin (btc) mining business. technology/celsius-network-faces-roadblocks-pivot-bitcoin-mining-2023-11-30/” rel=”nofollow noopener” target=”_blank”>report.
Celsius network faces possible setback
Last week, Celsius Network announced its decision to streamline its post-bankruptcy operations focused solely on bitcoin mining. This change was prompted by SEC skepticism around Celsius Network's other planned business lines.
Although the SEC did not formally oppose Celsius Network's previous bankruptcy plan, the agency expressed reservations about cryptocurrency lending and betting activities, which it had previously opposed.
Judge Glenn expressed concern during the hearing, noting that the proposed transformation initially deviates from the agreement. approved by creditors. Glenn further emphasized that Celsius Network needed to address the SEC's concerns and expressed frustration, stating that it had been a “broken record” about the importance of reaching an agreement with the regulatory body. According to Judge Glenn, the revised agreement could face significant opposition from creditors.
During the hearing, Celsius Network attorney Chris Koenig argued that the law passed by the court bankruptcy plan It gave the company the flexibility to move into a mining-only business.
Koenig stated that a new vote by creditors was not necessary since the new agreement would be equally beneficial for creditors. The revised plan allows Celsius Network to release $225 million in cryptocurrency assets that would have been managed by a consortium of outside investors, known as Fahrenheit, under the previous bankruptcy plan.
He new proposal offers creditors a 67% recovery, an increase from the 61.2% recovery under the Fahrenheit agreement.
Opposition from unrepresented clients seeking full settlement
According to the report, under the revised plan, Celsius Network's post-bankruptcy mining business will be overseen by US bitcoin Corp, chosen instead of the Blockchain Recovery Investment Consortium (BRIC) as the back-up bidder after a concluded auction.
Lawyer Celsius Koenig defended the decision, deeming the BRIC agreement “obsolete” and citing US bitcoin's most recent involvement in the Fahrenheit supply. A lawyer representing BRIC argued that Celsius Network should have honored the backup offer agreement instead of seeking a new deal.
Two clients, representing themselves without legal representation, expressed their opposition to the settlement in court papers filed Wednesday. They argued that Celsius Network should be liquidated entirely.
The crypto Lender The proposed transformation into a bitcoin mining business faces potential hurdles, as a US bankruptcy judge suggests a new vote by creditors may be necessary.
The revised plan offers greater recovery for creditors, but it remains to be seen whether it will gain enough support. The outcome of this ongoing legal battle will have a significant impact on the company's future operations and the cryptocurrency lending industry as a whole.
Currently, the company's native token, CEL, is trading at $0.2475. The token has seen significant price increases of 6.7% in the last seven days and 3.9% in the last fourteen days.
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