- Celsius Network’s bankruptcy exit plan has hit a snag.
- The company wants to transition into a Bitcoin mining firm.
- A bankruptcy court judge believes the plan requires further approvals.
Cryptocurrency lender Celsius Network faces hurdles in its revival plan of transforming into a Bitcoin mining company.
On November 20, Celsius proposed its updated bankruptcy exit plan of shifting from crypto lending to Bitcoin mining following regulatory pressure from the U.S. Securities and Exchange Commission (SEC).
When submitting the details of this new foray in a November 30 hearing, the bankruptcy court expressed its reservations about the plan.
Celsius Advised to Seek Creditor Vote and Agree with SEC
According to reports, U.S. Bankruptcy Judge Martin Glenn of New York asserted that Celius’s newly proposed bankruptcy exit plan “could face substantial opposition” from creditors given that they had not voted on the matter.
Celsius attorney Chris Koenig reportedly challenged the judge’s view, arguing that the same bankruptcy court approved the company’s plan and granted it the flexibility to pivot to a mining-only business. The attorney said this deal was “equally good” for creditors, and a new vote wasn’t required.
On the SEC’s issue, despite the securities watchdog not objecting to Celsius’s newly proposed restricting plan before it was approved, the company noted that the SEC was unwilling to approve crypto lending and staking activity, which the agency had previously opposed.
Without pointing fingers at either Celsius or the SEC, the judge urged the two parties to reach an agreement.
But even as Celsius proceeds to a likely vote on the matter, some customers are still opposed to the restricting plan.
Customers Vouch for Liquidation
Per the report, two customers acting without legal representation filed documents in court on Wednesday opposing the deal, arguing that Celsius should instead undergo full liquidation.
In the meantime, Celsius claims that creditors can expect a 67% recovery under the new restructuring plan with U.S. Bitcoin, up from 61.2% under a passed deal with Fahrenheit.
Stay updated on what creditors in the Celsius bankruptcy case recently agreed to:
$2B Celsius Reimbursement Finally Allocated for Creditors
Read more about ex-Celsius exec Mashinsky’s guilty plea:
Ex-Celsius Exec Pleads Guilty, Cooperates Against Mashinsky