Celsius Network, a cryptocurrency lender, has announced plans to unstake its Ethereum (ETH) holdings in order to distribute assets to creditors. The company will carry out a significant unstaking event in the coming days to offset costs incurred during the restructuring process. This move comes after Celsius Network faced a liquidity crisis in July 2022, leading to a freeze on withdrawals and subsequent filing for Chapter 11 bankruptcy protection.
Eligible creditors will receive in-kind distributions of Bitcoin (BTC) and Ethereum (ETH) as outlined in the approved plan. Celsius Network has been working towards a settlement plan that allows qualified users to withdraw 72.5% of their crypto holdings until February 28. Court documents reveal that approximately 58,300 users held a total of $210 million in custody assets.
Founder and former CEO of Celsius Network, Alex Mashinsky, who is currently out on bail after being arrested on fraud charges, is scheduled to face a jury trial on September 17. In a recent development, Celsius has been granted permission to proceed with a second alternative that involves the creation of a public company dedicated solely to Bitcoin mining.
The new arrangement allows creditors to receive a portion of their recovery through shares in the upcoming Bitcoin mining company, known as MiningCo. This plan unlocks $225 million in crypto assets that were initially intended to finance new ventures but were rejected by the Securities and Exchange Commission (SEC). MiningCo will be operated by Hut 8 under a four-year mining management contract, with five mining locations in Texas.
Celsius Network plans to relaunch under a temporary name, “NewCo,” focusing on staking and mining activities. The company projects a balance sheet of $1.25 billion, with $450 million in liquid cryptocurrency. It anticipates generating annual earnings of $10 to $20 million through staking crypto on the Ethereum network.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Alex Mashinsky |
| Companies | Securities and Exchange Commission (SEC), Celsius Network, Hut 8, MiningCo, U.S. Bankruptcy Court for the Southern District of New York |
| Currencies | Bitcoin, Ethereum |
| Securities | None |
