Crypto

Celsius hopes to begin paying back customers by the end of the year

Celsius hopes to begin paying back customers by the end of the year

The failed cryptocurrency lender believes it can make good on its outstanding debt

During the October 2 hearing seeking to approve its reorganization proposal, crypto lender Celsius Network told a judge it would start paying back its customers by the end of 2023.

The September 29 filing indicates that Celsius plans to make partial payments to creditors using $2.03 billion in Bitcoin, Ether and shares in NewCo. Celsius legal counsel Christopher Koenig said in his opening statements at the New York confirmation hearing on Monday that the new company named “NewCo” will have $450 million in seed funding following the proceedings.

NewCo is backed by companies in a consortium called Fahrenheit LLC, which will also manage the staking and mining business. Judge Martin Glenn is presiding over the case and is weighing whether to approve Celsius’s restructuring plan, which security regulators must also endorse. Despite having a large majority of the votes in favor at over 95%, according to reports, some creditors are challenging the plan.

In a filing presented at the hearing, Celsius said:

"The Debtors arrive at Confirmation with a Plan that has the support of over 95% of voting Account Holders by both number and dollar amount."

If the Celsius restructuring plan is approved, it would become one of the first crypto platforms that failed in 2022 to be revived after filing for Chapter 11 bankruptcy.

Celsius customers have patiently waited to recover their assets since June 2022, when the company suspended withdrawals after the Terra ecosystem collapsed. In July 2023, the US Securities and Exchange Commission charged Celsius and CEO Alex Mashinsky with financial fraud and allegedly raising funds through misleading “crypto asset securities” offers.

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