The Southern District of New York Bankruptcy Court confirms Celsius’ bankruptcy exit plan, granting creditors access to $2 billion in crypto assets. Customers are set to receive returns and shares in the rebranded NewCo.
The court’s decision addresses the status of CEL Token and the Earn Program, emphasizing it doesn’t determine their classification under securities laws. Celsius CEO Alex Mashinsky’s arrest in 2023 adds a layer of complexity to the case.
The Celsius bankruptcy plan has received approval from the Southern District of New York Bankruptcy Court, signaling a turning point for creditors. Judge Martin Glenn’s confirmation paves the way for customers to reclaim part of their funds and acquire shares in the revamped entity, NewCo.
The approved plan allocates around $2 billion in Bitcoin to creditors. Notably, many creditors engaged in Celsius’ Earn program, entitling them to weekly rewards through locked CEL tokens. The court’s decision explicitly states that it doesn’t ascertain the securities status of CEL Token or the Earn Program under existing laws.
NewCo, managed by the Fahrenheit consortium, plans to expand former Celsius mining operations, leverage illiquid assets, and undergo developmental initiatives, pending regulatory approval.
The situation is intensified by the 2023 arrest of Celsius CEO Alex Mashinsky, facing charges of securities and commodities fraud. Former chief revenue officer Roni Cohen-Pavon’s guilty plea further complicates the narrative, with sentencing scheduled for Dec. 11.