Crypto lender Celsius Network cleared to exit bankruptcy

investing.com:

By Dietrich Knauth

NEW YORK (Reuters) — Crypto lender Celsius Network received U.S. bankruptcy court approval on Thursday for a restructuring plan that will return cryptocurrency to customers and create a new company owned by Celsius creditors.

U.S. Bankruptcy Judge Martin Glenn in Manhattan signed off on the restructuring in an order published Thursday. The reorganized business will be managed by Fahrenheit LLC, a consortium that includes hedge fund Arrington Capital, and it will focus on mining new bitcoin and earning «staking» fees by validating blockchain transactions.

New Jersey-based Celsius filed for Chapter 11 protection in July 2022, one month after freezing customer accounts to prevent withdrawals. Celsius, which was once valued at $3 billion, was one of the largest crypto collapses last year.

Michael Arrington, founder of Arrington Capital, said Thursday that Celsius' revival stands apart from other crypto companies that collapsed in 2022 and were unable to reorganize.

Crypto lenders BlockFi and Voyager Digital were wiped out in bankruptcy, and cryptocurrency exchange FTX remains stuck in Chapter 11 proceedings.

«Today marks the culmination of a journey that has been far too long and far too expensive for Celsius creditors,» Arrington said in an email. «We are eager to dig in on our go-forward plan to make things whole for our creditors.»

Fahrenheit will buy a minority stake in the reorganized Celsius for $50 million and will publicly list the new company's stock on Nasdaq, allowing Celsius customers to sell equity shares that they will receive as part of their bankruptcy recovery, according to court documents.

In addition to their stake in the new company, Celsius customers will receive a partial