Investing.com | Editor Ambhini Aishwarya
Published Nov 21, 2023 07:20AM ET
NEW YORK – In a significant development amid its insolvency proceedings, Celsius Network has received approval from the US Bankruptcy Court in the Southern District of New York to restructure into a Bitcoin mining operation. This move is part of a strategy to repay account holders whose funds have been frozen.
The court-sanctioned transition marks a potential exit from bankruptcy for Celsius and involves the creation of a new entity, Mining NewCo, dedicated to Bitcoin mining operations. Shares for a new Bitcoin-focused public entity are also planned to be registered for its customers, signaling a shift in business focus for the embattled cryptocurrency lender.
Celsius Network’s pivot replaces a previous agreement with Fahrenheit LLC following their $2 billion bid. The company is now preparing to seek court approval for this strategic shift and, pending SEC regulatory clearance, aims to begin creditor distributions by January 2024.
Customer skepticism remains high about this change in direction to Bitcoin mining. Celsius has prepared an alternative liquidation plan that could be implemented if it encounters regulatory challenges. This cautious approach reflects the complex nature of cryptocurrency regulations and the company’s commitment to finding a viable path forward for its customers and creditors.
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Written By: Investing.com