Celsius Unveils the Debt Recovery Plan

Cryptolending platform Celsius Network has unveiled a business reorganization plan, thanks to which the company plans to recoup losses from users and pay off debts to creditors.

On July 14, Celsius filed for Chapter 11 bankruptcy in a New York City court, according to which it is impossible to initiate legal proceedings against the debtor, allowing him to establish financial transactions.

Later, the head of the company, Alex Mashinsky, said that as of July 13, Celsius owned $4.3 billion in assets, when its liabilities to customers and creditors amounted to $5.5 billion.

On July 18, the first Celsius bankruptcy hearing took place. On that day, Kirkland & Ellis, the law firm representing the platform, submitted a new document to the court, according to which, from March 30 to July 14, 2022, the value of assets under management of the company decreased by $17.8 billion.

But the platform has an indemnity plan that is heavily dependent on the future profits of its mining subsidiary Celsius Mining, although it is also listed as a “debtor entity.”

According to CoinDesk, at the hearing, Celsius’s lawyers asked for approval of more than $5 million in additional costs to complete the construction of a mining facility in Texas, which takes about two more months.

The judge approved the request and ruled that during the reorganization process, the company’s assets would be under the control of representatives of the US Department of Justice.

However, the Ministry of Justice expressed concerns about the viability of the Celsius mining business.

Platform representatives objected, stating that Celsius Mining has more than 43,000 bitcoin mining rigs. Their number is planned to be increased to 112,000 around the second quarter of 2023.

The lead lawyer for the company, Pat Nash, said that Celsius Mining generates approximately 14.2 BTC daily. By the end of 2022, the company expects to mine 10,100 BTC (~$221 million at the exchange rate at the time of writing). And if everything goes as planned, the company hopes to generate around 15,000 BTC in 2023.

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