A US judge has approved a bankruptcy plan for a crypto lender that filed for bankruptcy in July 2022 after its token plummeted by 99% and it was unable to fulfill withdrawals.
According to a recent court filing, the new plan from Celsius Network will generate funds for a new mining and staking corporate spinoff designed to repay creditors.
The company, dubbed “NewCo,” will have a $1.25 billion balance sheet, $450 million of which will be liquid crypto.
Explains bankruptcy judge Martin Glenn,
“NewCo intends to stake some or all of this liquid cryptocurrency to earn staking yields on the Ethereum network, which would generate anywhere from $10 to $20 million per year.”
The mining portion of the business has projected 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $61.8 million, according to Glenn.
NewCo will be owned by customers but managed by a collection of companies under the name Fahrenheit LLC.
The judge also notes that nothing in his order constitutes a finding under federal securities laws determining whether or not crypto tokens or transactions are securities.
“The right of the U.S. Securities and Exchange Commission to challenge transactions involving crypto tokens on any basis is expressly reserved.”
Celsius Network’s native token, CEL, is trading at $0.262 at time of writing. The 275th-ranked crypto asset by market cap is up nearly 5% in the past 24 hours.
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