Celsius Network, a prominent cryptocurrency lending platform, is facing a pivotal moment as it seeks to transition to a Bitcoin mining business. This shift, prompted by regulatory guidance, requires a new vote from creditors, as indicated by U.S. bankruptcy judge Martin Glenn during recent court proceedings.
Judge Glenn expressed concern over the sudden change in Celsius's business model, noting that it significantly deviates from the initial agreement with creditors. This alteration, a response to skepticism from the U.S. Securities and Exchange Commission (SEC) towards the company's original crypto lending and staking plans, might face resistance from creditors.
Celsius's attorney, Chris Koenig, argued that the existing bankruptcy plan grants the firm the flexibility to pivot exclusively to Bitcoin mining. He suggested that a new vote may not be necessary, stating that the revised strategy is equally beneficial for creditors.
Notably, some customers have expressed opposition to the new plan, advocating for complete liquidation of Celsius instead. Despite these challenges, Celsius’s new proposal is set to release $225 million in crypto assets from external investor control, with creditors projected to receive a 67% recovery, a significant improvement from the previous arrangement.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
