Celsius to Transition to Mining-Only NewCo following Bankruptcy Court's Confirmation of Plan - Blockchain.News
News

Celsius to Transition to Mining-Only NewCo following Bankruptcy Court's Confirmation of Plan

Celsius Network, following bankruptcy court approval, is transitioning to a Bitcoin mining-focused entity to address regulatory challenges from the SEC.


  • Nov 22, 2023 09:29
Celsius to Transition to Mining-Only NewCo following Bankruptcy Court's Confirmation of Plan

Celsius Network LLC, a global cryptocurrency platform, is set to undergo a significant transformation following the confirmation of its Chapter 11 plan by the United States Bankruptcy Court for the Southern District of New York. This change comes after facing challenges with the U.S. Securities and Exchange Commission (SEC).

The restructuring plan initially involved creating a new company with Fahrenheit, LLC, focusing on various crypto business activities. However, the SEC's request for more information about Celsius' assets has led to a strategic pivot. Celsius is now planning to transition to a publicly traded Bitcoin mining company, owned by its customers, known as Mining NewCo​​​​​​.

Fahrenheit, an investment vehicle, had emerged as a key player in Celsius' reorganization plans. The SEC's involvement and requests for detailed information about Celsius' assets and business operations have significantly influenced the new direction. There are ongoing discussions about the management and future of Mining NewCo​​.

Celsius had filed for Chapter 11 bankruptcy in July 2022, revealing a $2 billion deficit in its balance sheet. The plan included returning cryptocurrencies to its customers and creating a new company focused on Bitcoin mining. This pivot to mining is a response to the regulatory scrutiny, particularly from the SEC, which has been a significant factor in shaping the company's post-bankruptcy trajectory​​​​​​.

The confirmation of Celsius' restructuring plan marks a new chapter in the company's journey. While the company initially faced a significant deficit and regulatory challenges, the transition to a mining-only model under NewCo represents a strategic shift. This shift aims to address regulatory concerns and set a path for recovery and growth in the evolving cryptocurrency landscape. Celsius' focus on Bitcoin mining signifies its adaptation to the changing regulatory and business environment.

Image source: Shutterstock