Bankrupt crypto lender Celsius Network has revealed that the company plans to transition to an exclusively Bitcoin mining company, following confirmation of the plan by its bankruptcy court.
Celsius Transition to NewCo Mining
Celsius NetworkThe transition of into a mining company coincides with its bankruptcy proceedings. Over the past year, the digital asset company has struggled financially, leading to its bankruptcy filing.
In September, Celsius filed an application repayment plan as well as his bankruptcy plan to resolve the company’s financial problems. This saw over 95% of Celsius’ creditors vote in favor of this repayment plan.
According to the recent court filing, the cryptocurrency company intends to convert its services exclusively to Bitcoin mining operations and the new company will be known as Mining NewCo.
Furthermore, the company appears to have abandoned its initial plan regarding the future of the business with the Fahrenheit Group. The company said the transition was the core business of the new company that would be created with Fahrenheit, LLC.
This was the primary business of the new company proposed to be formed with Fahrenheit, LLC and described in the plan (the “Fahrenheit NewCo”).
The new company, believed to be called Fahrenheit NewCo, was created after bought Celsius this year, after purchasing Celsius in a bidding war.
Celsius and Fahrenheit Group initially reached an agreement under which the group would provide the company with funds and operational expertise. Fahrenheit successfully acquired the company’s assets this year.
In the meantime, the firm is in contact with certain stakeholders in order to organize the management of the Bitcoin mining company.
The SEC announced the transition
The company’s plan to transition into a Bitcoin mining company was sparked by comments from the U.S. Securities and Exchange Commission (SEC) after the court upheld its plan. The company also emphasized that the new mining company will be owned by its customers.
The file stated:
Celsius received comments from the Securities and Exchange Commission (the “SEC”) over certain aspects of the plan, leading Celsius to now intend to begin the process of applying to register the shares of a new publicly traded Bitcoin mining company that will be owned by Celsius customers (the “Mining NewCo”).
Additionally, the returns appear to have also conveyed the original plan to transfer the company’s assets to the Fahrenheit Group. As noted in the filing, Celsius Estates will retain certain assets for monetization by the plan administrator.
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 Celsius Estates to be administered and monetized by the Plan Administrator and/or Litigation Administrator for the benefit of creditors.
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