Celsius Network, a cryptocurrency lending firm facing financial troubles, has expressed its intention to start repaying customers by the end of the year during an October 2 hearing where it sought approval for its restructuring plan.
The restructured entity, referred to as "NewCo," is set to receive $450 million in seed funding, as disclosed by Christopher Koenig, Celsius' legal counsel, during opening statements at the confirmation hearing held in New York.
According to documents filed on September 29, Celsius plans to utilize $2.03 billion worth of Bitcoin to settle certain creditors, along with Ethereum and stakes in new companies. NewCo is backed by a consortium known as Fahrenheit LLC, which will oversee mining and staking operations.
Judge Martin Glenn, presiding over the case, is currently evaluating whether to approve Celsius' restructuring plan, a process that also requires the green light from regulatory authorities. Despite receiving strong support in terms of the number and value of votes, the plan is reportedly facing challenges from some creditors.
In a filing submitted during the confirmation hearing, Celsius stated, "The Debtors proposed a plan at the time of confirmation that was supported (in both quantity and amount) by more than 95 percent of the voting account holders." If approved, Plan Celsius would be among the first instances since 2022 where a failed cryptocurrency platform has been resurrected under Chapter 11 bankruptcy proceedings.
Celsius customers have been awaiting repayment since the company suspended withdrawals in June 2022 following the collapse of the Terra ecosystem.
