Defunct cryptocurrency lender Celsius has amended its bankruptcy filing pending approval from the New York Bankruptcy Court following a successful takeover deal with the Fahrenheit cryptocurrency consortium. The cryptocurrency lender filed its restructuring plan on June 15.
Under the revised plan, Celsius will convert all of its customers' altcoins (except "escrow and withholding accounts") into Bitcoin and Ethereum, Starting July 1st. The new restructuring plan proposes to deal with claims of retail borrowers through an offsetting treatment .The term "elimination treatment" refers to the comparison of losses with profits for a given year. Losses of unset off earnings can be carried forward and offset against earnings in subsequent years. One Twitter user explained how the offsetting process works for borrowers based on the portion of the loan they repay: David Adler of the law firm McCarter & English said on Twitter that Celsius' proposed restructuring could face opposition from borrowers.He noted that the debtor (Celsius) demanded repayment of the loan but had no intention of fulfilling its contractual obligations, such as returning collateral to the borrower. That might be something borrowers would object to, he added.
"This proposed 'treatment' violates all consumer lending laws (state, federal) and casual borrower groups will oppose the plan." In addition, Celsius has requested permission to appoint Chris Ferraro as foreign representative in relation to the UK courts' cross-border insolvency regulations in the UK. In this way, the company's assets in the UK will be protected and US Chapter 11 will be recognized as a "foreign principal proceeding" for organizing global solutions. The Fahrenheit crypto consortium comprising venture capital firm Arrington capital and miner US Bitcoin Corp won a bid to acquire the Celsius assets on May 25. At the time, Celsius' assets were estimated to be worth about $2 billion. Under the new agreement,The new company is expected to receive approximately $45-500 million worth of liquid cryptocurrency, while Bitcoin Corporation of America plans to build a 100-megawatt Bitcoin, mining plant.
Celsius suspended withdrawals on June 13, 2022, after the company was mired in bad investments and cryptocurrency contagion due to the collapse of the Terra ecosystem.
