Celsius Network has begun its bankruptcy trial in New York, with the goal of relaunching itself as a user-owned Bitcoin miner. The company has informed a judge that it intends to repay customers whose funds have been frozen since June 2022 with a portion of what they are owed by the end of the year. A consortium called Fahrenheit LLC, led by Arrington Capital, has been selected to manage the mining business and provide the required financial support.Judge Martin Glenn is deliberating the approval of Celsius’s plan, despite opposition from some customers who have been unable to access their funds. Additionally, an affiliate of Lantern Ventures is challenging the plan because Celsius’s advisors have overvalued the new business. The new venture will also need clearance from securities regulators.If approved, the plan would mark the first instance of a failed crypto platform being revived under Chapter 11 after a series of insolvencies rocked the industry last year. Customers will receive a stake in litigation against co-founder and former CEO Alex Mashinsky and other former executives charged with fraud by federal prosecutors.Mashinsky attributes Celsius’s failure to external market forces beyond his control, such as the crash of stablecoins Luna and TerraUSD in May 2022 and unexpected mass withdrawals by Celsius customers. An independent examiner’s review of the company’s collapse revealed that Celsius had been utilizing customer assets to fund its operational expenses since 2020. Chris Ferraro, interim CEO, is scheduled to testify in support of the bankruptcy plan on Tuesday.Celsius Network has commenced its bankruptcy trial in New York, seeking to relaunch itself as a user-owned Bitcoin miner. The company has informed a judge that it intends to repay customers whose funds have been frozen since June 2022 with a portion of what they are owed by the end of the year. A consortium called Fahrenheit LLC, led by Arrington Capital, has been selected to manage the mining business and provide the required financial support. Judge Martin Glenn is deliberating the approval of Celsius’s plan, despite opposition from some customers. If approved, the plan would mark the first instance of a failed crypto platform being revived under Chapter 11. Customers will receive a stake in litigation against co-founder and former CEO Alex Mashinsky and other former executives charged with fraud by federal prosecutors. Mashinsky attributes Celsius’s failure to external market forces beyond his control, such as the crash of stablecoins Luna and TerraUSD in May 2022 and unexpected mass withdrawals by Celsius customers. An independent examiner’s review of the company’s collapse revealed that Celsius had been utilizing customer assets to fund its operational expenses since 2020. Chris Ferraro, interim CEO, is scheduled to testify in support of the bankruptcy plan on Tuesday. The trial outcome will determine Celsius Network’s future and shed light on the potential revival of failed crypto platforms under Chapter 11.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | |
| Sentiment | negative |
| Relevance Score | 8 |
| People | Arrington Capital., Christopher S. Koenig, Martin Glenn, Alex Mashinsky, Chris Ferraro |
| Companies | Fahrenheit LLC, US Securities and Exchange Commission, Lantern Ventures, Celsius Network, Arrington Capital |
| Currencies | Ethereum, Celsius Network, Bitcoin, TerraClassicUSD, Terra Luna Classic |
| Securities | None |
