It has been revealed that the crypto lender Celsius will be creating a new company for creditors. Here are the details on the interesting matter below.
Celsius to create a new company
A bankruptcy plan for crypto lender Celsius Network, which had filed for bankruptcy in July 2022 due to a drastic decline in the value of its token, has been approved by a US judge.
The company is now looking to generate funds for a new corporate spinoff, called “NewCo,” that will focus on mining and staking in order to repay its creditors.
As per a recent court filing, NewCo is expected to have a balance sheet worth $1.25 billion, with $450 million in liquid crypto assets.
Explains bankruptcy judge Martin Glenn:
“NewCo intends to stake some or all of this liquid cryptocurrency to earn staking yields on the Ethereum network, which would generate anywhere from $10 to $20 million per year.”
Glenn projected that the mining division of the business would earn $61.8 million in 2024 before accounting for interest, taxes, depreciation, and amortization (EBITDA).
NewCo, which will be owned by customers, will be managed by a group of companies under the name Fahrenheit LLC.
The judge clarified that his order does not constitute a determination under federal securities laws regarding whether crypto tokens or transactions are securities.
“The right of the U.S. Securities and Exchange Commission to challenge transactions involving crypto tokens on any basis is expressly reserved.”
As revealed by the online publication the Daily Hodl, Celsius Network’s native token, CEL, is trading at $0.262 at time of writing. The 275th-ranked crypto asset by market cap is up nearly 5% in the past 24 hours.
A couple of months ago, we revealed that the FTC, DOJ, SEC, and CFTC have filed both civil and criminal charges against the former CEO and executives.
The former CEO has been accused of intentionally deceiving consumers by making false claims about secure and available deposits, resulting in cryptocurrency transfers to the platform. Check out our previous article in order to learn more details about this.
