In a significant development, Celsius Network LLC, the bankrupt cryptocurrency lender, has received approval from Judge Martin Glenn to transition into a creditor-owned Bitcoin miner. The decision was made with the aim of repaying customers with frozen accounts using cryptoassets and company stock.
The company managed to secure sufficient support from creditors to proceed through Chapter 11, despite allegations of CEL token manipulation against its former Chief Executive Officer, Alex Mashinsky. The CEL token is used by the company for distributing assets and stock to creditors. However, this transformation is not without its hurdles.
The company's change in business model faces skepticism from customers and regulatory challenges. It needs swift approval from the Securities and Exchange Commission (SEC) or it risks liquidation. Following a multi-week trial, customers have argued that the bankruptcy plan undervalues the CEL token.
This new development in the Celsius Network's bankruptcy proceedings indicates a novel approach to resolving insolvency issues within the cryptocurrency industry. The move towards becoming a Bitcoin miner signifies an attempt to leverage the assets and infrastructure already in place at the company to provide a return for creditors, while also navigating the complex regulatory landscape surrounding digital currencies.
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