Celsius seeks ‘swift approval’ from court after bankruptcy plan vote
Roughly $2 billion of bitcoin and ether would be distributed to creditors as part of the plan
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Celsius creditors have overwhelmingly voted in favor of the failed crypto lender’s bankruptcy plan, according to court documents filed Monday.
More than 95% of creditors voted to support the plan, but it still has to be confirmed in a hearing on Oct. 2. In a post on X, Celsius said it hopes for a “swift approval to continue our path to emergence.” The creditor vote was greenlit by the court back in August.
The plan calls for roughly $2 billion of bitcoin (BTC) and ether (ETH) to be distributed to creditors. Additionally, equity in NewCo — the company being created out of the bankrupt lender — will be distributed by the debtors.
If the plan is approved, Fahrenheit, which won the auction for Celsius back in May, would provide “the capital, management team and technology required to successfully establish and operate” the new firm.
“Our vision includes optimizing existing infrastructure, exploring new growth opportunities, diversifying revenue streams and delivering meaningful benefits to Celsius’ customers and creditors. We look forward to engaging more deeply with the Celsius community in the weeks ahead regarding the Plan,” Steve Kokinos of Fahrenheit Holdings said at the time.
If approved, Kokinos, previously the CEO of Algorand and a co-owner of Fahrenheit, would take the helm of NewCo.
In the original filing, Arrington Capital’s Michael Arrington was set to join the board. A court filing on Saturday, Sept. 23 revealed that Arrington would not be nominated to the board of directors. Ravi Kahza is instead set to take the seat.
In an X post, Arrington said he disagreed “with some of the decisions made around board constitution and, in particular, the board observers.”
“I still fully support the deal, and look forward to contributing in ways other than participating on the board of directors. Apart from not joining the board of directors, our investment and active advisory role via Fahrenheit will go on as planned,” he added.
The Securities and Exchange Commission, however, has taken issue with the role of Coinbase in the plan.
The “Coinbase Agreements go far beyond the services of a distribution agent, contemplating brokerage services and master trading services that implicate many of the concerns raised in the SEC’s District Court action against Coinbase,” the SEC said in a court filing last week.
The SEC noted that the debtors “confirmed that they do not intend for Coinbase to provide brokerage services to the Debtors, despite the language in the Coinbase Agreements to the contrary.”
The regulatory agency said it reserved the “rights to object” if Celsius doesn’t address the role of Coinbase.
Coinbase’s Paul Grewal, in an X post, said that the US crypto exchange is “proud to engage with Celsius to distribute crypto back to its customers.” He added that the company will address the issue with the bankruptcy court.
The SEC sued Celsius and ex-CEO Alex Mashinsky back in July. It also has an open lawsuit against Coinbase.
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