Crypto lending platform Celsius Network filed for bankruptcy on July 13, exactly one month after it stopped withdrawals and transfers from accounts. As part of his bankruptcy court hearing, Celsius today presented its financial overview and restructuring plan to US New Southern District Bankruptcy Court Judge Martin Glenn.
Celsius unveils restructuring plan
As you follow on Kriptokoin.com, Celsius restructuring plans lay out some of the steps. First, it involves negotiating the restructuring process with stakeholders. It then determines the funding of Bitcoin mining operations through Bitcoins minted by its subsidiary. Finally, it deals with asset sales and third-party investment opportunities. In addition, the company offers its clients the options to either get discounted cash back or continue investing with crypto assets.
In this context, the bankrupt crypto lender has revealed its restructuring plans and options for clients to get their funds back. Last week, Celsius announced $5.5 billion in liabilities and $4.3 billion in assets. Meanwhile, the $600 million CEL token is currently worth around $170 million.
Celsius plans to negotiate a comprehensive restructuring with stakeholders to preserve business value. Also, the company aims to help the company pay its creditors while holding Bitcoin. It will continue to run Bitcoin mining operations using minted Bitcoins for this. In addition, the company will consider “asset sales and third-party investment opportunities” to meet its financial obligations.
What will the payment methods be like?
Celsius will soon announce a plan to allow customers to get their funds back. However, it is possible to have a discounted cash payment. Another option is to invest in the firm until the restructuring is complete. It is possible that the plan will also include the distribution of CEL tokens. The goal is to maximize returns for stakeholders and reorganize the business.
According to data up to July 13, Celsius has more than 1.7 million users in over 100 countries. It keeps almost all assets in Fireblocks. It does not rely on a middleman to hold the ‘keys’ of crypto assets. In addition, Earn Program owns 77% of the deposit.
Celsius client funds and ‘CEL Short Squeeze’
After Celsius filed for bankruptcy, the terms and conditions revealed authority over the deposits. That’s why it impressed customers so much. According to the terms and conditions, Celsius customers are unlikely to get the funds back if the company goes bankrupt.
Meanwhile, many customers recovered their losses through the community-led “CEL Short Squeeze”. Users managed to deliberately lower the CEL token price from $1 to $0.43 in just one day.
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