The insolvent cryptocurrency lending company Celsius, has apparently secured a means to finance its planned revival, as reported by Bloomberg on October 2nd. In the midst of bankruptcy proceedings, Christopher S. Koenig, representing Celsius revival plans, expressed the company’s intention to emerge from bankruptcy with a substantial $450 million seed funding injection.
This substantial infusion of capital is set to be provided by Fahrenheit LLC, a consortium of businesses deeply entwined with Celsius’ bankruptcy proceedings. Notably, Fahrenheit successfully emerged as the winning bidder for Celsius’ assets back in May 2023, with the final asset sale decision being made during an August vote.
Revived Celsius Shifts Focus to User-Owned Bitcoin Mining, Aims to Compensate Customers and Creditors
The Rejuvenated Celsius: Shifting Towards a User-Owned Bitcoin Mining Model, Uncertain Future for Its Lending Business Celsius’ potential success in executing its revival plan could lead to more efficient compensation for customers and creditors. While the company anticipates distributing $2 billion in cryptocurrency, it also plans to offer creditors ownership stakes in the new venture, along with participation in legal actions against former Celsius CEO Alex Mashinksy and other executives.
Celsius has set a goal to commence user repayments by the conclusion of 2023, a target that was established in June, concurrent with various settlements related to the company.
The revival strategy has evolved since the month of August
Bloomberg had previously mentioned that Celsius initially targeted an August relaunch, during which they sought input from their customers. On September 26, Celsius disclosed that 95% of their customers had voted in favor of the recovery plan. However, according to Bloomberg’s recent report, there are still dissenting voices. One creditor owed $82 million contends that the new company has been assessed at an inflated value by advisors.
It’s important to highlight that Celsius and its customers cannot proceed unilaterally. The final approval of the plan rests with securities regulators and the bankruptcy judge. In September, the blueprint for Celsius’ relaunch took shape. This included the appointment of Steven Kokinos, the former leader at Algorand, as the new CEO of the revival company. Additionally, Michael Arrington, CEO of Arrington Capital and the founder of TechCrunch, resigned from the board during this period.
Celsius aims to start repaying its users by the end of 2023, a target that was set following the conclusion of various settlements in June. However, it’s important to note that the journey ahead is not without its challenges. Some parties, including a creditor with an $82 million claim, remain skeptical, believing that the new company’s value has been overestimated.
Furthermore, Celsius cannot proceed unilaterally; its revival plan must receive approval from securities regulators and the bankruptcy judge. As the company navigates these complex waters, the crypto community and financial industry at large will be closely watched, as the fate of Celsius serves as a noteworthy case study in the ever-evolving and sometimes turbulent world of cryptocurrency finance.
Celsius, the once-bankrupt crypto lending firm, is forging ahead with an ambitious revival plan that has been gaining momentum since August. This plan marks a significant shift in the company’s focus, as it intends to operate as a “user-owned Bitcoin miner,” leaving the future of its previously central lending business uncertain.
The key to Celsius’s revival plans lies in securing $450 million in seed funding, a lifeline provided by Fahrenheit LLC, a group closely intertwined with Celsius’ bankruptcy proceedings. The company’s ability to compensate customers and creditors hinges on the success of this revitalization effort. Celsius has committed to distributing $2 billion in cryptocurrency while also offering creditors ownership stakes in the resurrected entity and a stake in litigation against former Celsius CEO Alex Mashinksy and other executives. These measures demonstrate a commitment to addressing past grievances and charting a new course.