Celsius seeks to convert alts to Bitcoin and Ether under reorganization plan

Celsius Submits Revised Bankruptcy Filing

Celsius, the now defunct crypto lender, has submitted a revised bankruptcy filing to a court in New York for approval following the successful acquisition by Fahrenheit. The reorganization plan was filed on June 15.

Beginning July 1, Celsius will be selling all altcoins from all customers, excluding Custody and Withhold accounts, and converting them into Bitcoin (BTC) and Ether (ETH) according to the revised plan.

The new reorganization plan proposes to handle the “Retail Borrow Claims” using the “Set Off Treatment.” This term refers to the evaluation of losses against gains in a given year. Uncompensated losses can be carried forward and deducted from income in subsequent years.

David Adler from the McCarter & English law firm tweeted that the restructuring proposal from Celsius could be met with resistance from the borrowers. He noted that Celsius Lending is asking for the loans to be repaid, but has no plan to comply with its contractual duties such as giving the collateral back to the borrowers. Adler suggested that this could be something the borrowers would not agree to.

Celsius has requested authorization to appoint Chris Ferraro as the foreign representative according to the Cross Border Insolvency Regulations (CBIR) of the English Court for the United Kingdom. By doing so, the company’s assets in the UK would be protected and the US Chapter 11 would be accepted as the “foreign main proceedings” for the purpose of establishing a worldwide settlement.

Celsius has added more than 428,000 stETH to Lido’s growing list of withdrawals.

The Fahrenheit consortium, consisting of venture capital firm Arrington Capital and miner US Bitcoin Corp, was successful in their bid to buy Celsius assets on May 25. At the time, the estimated worth of the Celsius assets was around $2 billion. As part of the agreement, the new company is projected to receive a liquid cryptocurrency worth between $450 – $500 million, while US Bitcoin Corp is intending to build a 100-megawatt Bitcoin mining facility.

On June 13, 2022, Celsius ceased withdrawals due to their involvement in unsound investments and the spread of cryptocurrency risks.

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