Loading...

Cryptocurrency lender Celsius’s bankruptcy plan faces creditor pushback

Celsius Network to Move Forward with Chapter 11 Restructuring Plan

Contents

Share link:

TL;DR

 

  • Celsius has made progress in relaunching operations by submitting an amended bankruptcy plan.
  • The Fahrenheit consortium has won the bidding for Celsius’ assets.
  • Creditor pushback is expected, with concerns raised over potential violations of consumer lending laws.

Unexpectedly, cryptocurrency lender Celsius has made a significant stride forward in its efforts to relaunch operations by submitting an amended bankruptcy plan. Several high-profile investors, including Arrington Capital and US Bitcoin Corp., formed the Fahrenheit consortium and ultimately won the bidding for Celsius’ assets, reflected in the proposed strategy. With this result, NovaWulf could not take control of the corporation and its $2 billion in assets.

The bankruptcy plan, submitted to the New York bankruptcy court in the early hours of Thursday, now awaits approval. However, creditor pushback seems inevitable, as some are already raising concerns. David Adler, a representative of borrowers from the McCarter & English law firm, took to Twitter to express his opposition to the proposed treatment outlined in the plan.

Adler argues that Celsius would violate consumer lending laws by not returning collateral to the borrowers he represents. He emphasized that his clients intend to contest the plan vehemently, given their collateral needs to be addressed adequately throughout the bankruptcy process.

Adler strongly condemned Celsius for its inadequate communication, emphasizing the urgent need for the company to demonstrate progress in the case and engage with stakeholders. He accused Celsius of neglecting his clients and keeping them uninformed, expressing their frustration at being left in the dark and neglected for seven weeks.

The Fahrenheit consortium, however, continues to hold out hope for a comeback by the Celsius thermometer even in the face of these criticisms. The agreement stipulates that the newly minted firm would receive between $450 and $500 million in a significant injection of liquid cryptocurrencies.

Furthermore, leading mining company US Bitcoin Corp has promised to build several state-of-the-art crypto-mining facilities. Consistent with the consortium’s long-term goals for Celsius, these initiatives include the construction of a 100-megawatt power plant.

The emergence of the Fahrenheit consortium as the leading bidder breathes new life into the beleaguered Celsius and injects fresh optimism into the cryptocurrency lending sector. As the bankruptcy court reviews the proposed plan, Celsius faces the daunting task of addressing creditor concerns while demonstrating its commitment to transparency and inclusivity. All eyes will be on the court’s decision and the subsequent actions of Celsius as it navigates the path to recovery and redemption.

In the ever-evolving digital finance landscape, the Celsius-Fahrenheit saga continues to captivate industry observers, vividly portraying the challenges and opportunities ahead for cryptocurrency lenders.

The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

Share link:

Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

Most read

Loading Most Read articles...

Stay on top of crypto news, get daily updates in your inbox

Related News

A rundown of all the crypto events happening in April
Cryptopolitan
Subscribe to CryptoPolitan