According to CoinDesk, a New York court has approved Celsius' exit from bankruptcy, a process that began in July last year. The lender's creditors had voted to approve a plan that would return as much as 85% of their holdings back to them. Customers who had funds tied up in Celsius will receive approximately $0.25 per CEL utility token. The crypto lender's reorganization plan was approved by a bankruptcy court on Thursday, with implementation expected to be completed by early 2024.
Celsius' exit from bankruptcy follows a $4.7 billion settlement with U.S. authorities over fraud allegations. Former CEO Alex Mashinsky, who resigned in September 2022, was arrested on fraud charges for allegedly manipulating the price of the lender's CEL token, an allegation he has denied. Mashinsky was released on a $40 million bond, and his trial is scheduled for September 2024. Chief Judge Martin Glenn of the United States Southern District of New York Bankruptcy Court confirmed a modified plan that was mostly agreed upon in late September.
Celsius announced on Thursday that it would return about $2 billion in cryptocurrency to account holders. The judge's order also hands control of the implementation of the reorganization to Fahrenheit Holdings, a group that includes Arrington Capital and crypto miner U.S. Bitcoin Corp. Fahrenheit won a bid to acquire the insolvent lender in May 2023. The plan will see the creation of a new company registered in Delaware, currently referred to as NewCo. The company will focus on mining and staking, with a $1.25 billion balance sheet. NewCo intends to stake some or all of its Liquid Cryptocurrency to earn staking yields on the Ethereum network, which would generate anywhere from $10 to $20 million per year.
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