The New York bankruptcy court has approved Celsius Network’s restructuring plan, effectively enabling the cryptocurrency lending platform to come out of bankruptcy. The plan, which was approved by creditors in September, will see Celsius return 67%-85% of digital assets to customers.
However, before Celsius can fully exit bankruptcy, it still needs approval from the US Securities and Exchange Commission (SEC) for its new bitcoin mining firm. The SEC is reportedly concerned about the potential for conflicts of interest between the mining firm and Celsius’s other business lines.
Celsius filed for bankruptcy in July 2022, citing “extreme market conditions.” The company had been struggling to meet customer withdrawal requests due to a liquidity crisis.
The approval of Celsius’s restructuring plan is a positive development for customers, who will now be able to recover a significant portion of their assets. However, the SEC’s approval for Celsius’s bitcoin mining firm is still pending, and it is unclear when this will be granted.
What does this mean for Celsius customers?
The approval of Celsius’s restructuring plan is a good sign for customers, as it means that they will now be able to recover a significant portion of their assets. However, it is important to note that the exact amount that customers will receive will depend on a number of factors, including the type of assets they held and the market value of those assets at the time of bankruptcy.
Celsius has said that it plans to begin returning assets to customers in early 2024. Customers will receive a distribution of their assets in the form of cryptocurrency and/or equity in the new Celsius company.
What is the SEC’s concern with Celsius’s bitcoin mining firm?
The SEC is reportedly concerned about the potential for conflicts of interest between Celsius’s bitcoin mining firm and its other business lines. For example, the SEC is worried that Celsius could use its mining firm to mine Bitcoin at a discounted rate, and then sell that Bitcoin to customers at a higher rate.
The SEC is also concerned that Celsius’s mining firm could give the company an unfair advantage in the cryptocurrency market. For example, Celsius could use its mining firm to mine new Bitcoin and then sell those coins to customers, which could drive down the price of Bitcoin and make it easier for Celsius to buy Bitcoin at a lower price.
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When will the SEC make a decision on Celsius’s bitcoin mining firm?
It is unclear when the SEC will make a decision on Celsius’s bitcoin mining firm. The SEC has not yet scheduled a hearing on the matter.
However, it is worth noting that the SEC has been increasingly scrutinizing the cryptocurrency industry in recent months. The SEC has brought a number of enforcement actions against cryptocurrency companies, and it has also proposed new regulations for the industry.
It is therefore possible that the SEC will take a more cautious approach to approving Celsius’s bitcoin mining firm. This could delay the approval process and prolong the bankruptcy proceedings.
Conclusion
The approval of Celsius Network’s restructuring plan is a positive development for customers, as it means that they will now be able to recover a significant portion of their assets. However, the SEC’s approval for Celsius’s bitcoin mining firm is still pending, and it is unclear when this will be granted.
Customers should continue to monitor the Celsius bankruptcy proceedings and stay informed of the SEC’s decision on the bitcoin mining firm.
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