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Crypto lender Celsius Network cleared to exit bankruptcy

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Crypto lender Celsius Network cleared to exit bankruptcy

Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

NEW YORK, Nov 9 (Reuters) – Crypto lender Celsius Network received U.S. bankruptcy court approval on Thursday for a restructuring plan that will return cryptocurrency to customers and create a new company owned by Celsius creditors.

U.S. Bankruptcy Judge Martin Glenn in Manhattan signed off on the restructuring in an order published Thursday. The reorganized business will be managed by Fahrenheit LLC, a consortium that includes hedge fund Arrington Capital, and it will focus on mining new bitcoin and earning “staking” fees by validating blockchain transactions.

New Jersey-based Celsius filed for Chapter 11 protection in July 2022, one month after freezing customer accounts to prevent withdrawals. Celsius, which was once valued at $3 billion, was one of the largest crypto collapses last year.

Michael Arrington, founder of Arrington Capital, said Thursday that Celsius’ revival stands apart from other crypto companies that collapsed in 2022 and were unable to reorganize.

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Crypto lenders BlockFi and Voyager Digital were wiped out in bankruptcy, and cryptocurrency exchange FTX remains stuck in Chapter 11 proceedings.

“Today marks the culmination of a journey that has been far too long and far too expensive for Celsius creditors,” Arrington said in an email. “We are eager to dig in on our go-forward plan to make things whole for our creditors.”

Fahrenheit will buy a minority stake in the reorganized Celsius for $50 million and will publicly list the new company’s stock on Nasdaq, allowing Celsius customers to sell equity shares that they will receive as part of their bankruptcy recovery, according to court documents.

In addition to their stake in the new company, Celsius customers will receive a partial repayment of the cryptocurrency assets they deposited on the platform. Celsius had 600,000 customers who held about $4.4 billion in interest-bearing Celsius accounts when it filed for bankruptcy, according to court documents.

The restructuring plan includes a settlement that values Celsius’s proprietary crypto token, CEL, at 25 cents. A court-appointed examiner reported in January that Celsius inflated the value of its own token to benefit company insiders, using methods that Celsius staff described as “very Ponzi-like.”

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The reorganized company will pursue litigation against Celsius founder Alex Mashinsky, who already faces U.S. criminal charges and a New York civil lawsuit for allegedly misleading customers and artificially inflating the value of CEL. Mashinsky has pleaded not guilty.

Reporting by Dietrich Knauth; Editing by Alexia Garamfalvi and Lisa Shumaker

Our Standards: The Thomson Reuters Trust Principles.

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HMRC to Require Crypto User IDs for Tax Starting 2026 – Regulation Bitcoin News

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HMRC to Require Crypto User IDs for Tax Starting 2026 – Regulation Bitcoin News
The United Kingdom’s tax authority will implement new regulations starting January 1, 2026, requiring crypto asset users to provide tax identification numbers and other personal information to service providers. Streamlining Tax Assessments and Penalties The United Kingdom’s tax authority, His Majesty’s Revenue and Customs (HMRC), has announced new regulations that will require crypto asset users […]
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Truth Social Files for Cryptocurrency Blue-Chip ETF

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Truth Social Files for Cryptocurrency Blue-Chip ETF

Truth Social, the social media platform backed by former U.S. President Donald Trump, has submitted an application for a cryptocurrency blue-chip ETF S-1 filing. This move marks a significant shift for the platform, which has been primarily known for its social media presence, into the realm of cryptocurrency investments. The filing indicates that Truth Social is aiming to capitalize on the growing interest in digital assets, particularly among its user base, which includes a significant number of individuals who are already engaged with cryptocurrencies.

The Trust’s assets are primarily composed of Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Ripple (XRP), and Cronos (CRO) held by the Trustee. Under the terms of the Trust Agreement, the Trust will allocate its assets to a percentage of the portfolio assets (allocation ratio) initially expected to be approximately 70% Bitcoin, 15% Ethereum, 8% SOL, 5% CRO, and 2% XRP. This allocation reflects a strategic focus on blue-chip cryptocurrencies, which are seen as more stable and less speculative compared to smaller, more volatile tokens.

The decision to file for a cryptocurrency ETF comes at a time when the cryptocurrency market is experiencing renewed interest. The market has seen a resurgence in activity, driven by factors such as declining interest rates and a more crypto-friendly regulatory environment. This shift has led many investors to reconsider their positions in cryptocurrencies, particularly in blue-chip tokens like Bitcoin and Ethereum.

The filing for a cryptocurrency ETF is a significant step for Truth Social, as it allows the platform to offer its users a more diversified investment option. By providing access to a blue-chip cryptocurrency ETF, Truth Social can attract a broader range of investors who are looking for a more secure and regulated way to invest in digital assets. This move also positions Truth Social as a forward-thinking platform that is adapting to the evolving financial landscape, where cryptocurrencies are becoming an increasingly important part of the investment ecosystem.

The submission of the S-1 filing is a crucial step in the process of launching an ETF. It involves providing detailed information about the fund’s structure, investment strategy, and risk factors to regulatory authorities. Once approved, the ETF will allow investors to gain exposure to a basket of blue-chip cryptocurrencies without having to directly purchase and manage individual tokens. This can be particularly appealing to investors who are new to the cryptocurrency market or who prefer the convenience and security of an ETF.

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The filing also highlights the growing integration of cryptocurrencies into mainstream financial products. As more platforms and companies enter the cryptocurrency space, the demand for regulated and secure investment options is likely to increase. This trend is driven by the recognition that cryptocurrencies offer unique benefits, such as decentralization, transparency, and the potential for high returns, which make them an attractive addition to traditional investment portfolios.

In summary, Truth Social’s submission of a cryptocurrency blue-chip ETF S-1 filing is a strategic move that reflects the platform’s commitment to innovation and its recognition of the growing importance of cryptocurrencies in the financial landscape. By offering a regulated and secure investment option, Truth Social can attract a broader range of investors and position itself as a leader in the evolving world of digital assets.

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Top Cryptocurrency Stocks To Add to Your Watchlist

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Top Cryptocurrency Stocks To Add to Your Watchlist
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