Celsius Network has received court approval for a restructure that will return withheld cryptocurrency to customers and establish a new company wholly owned by its creditors.
Judge Martin Glenn of Manhattan’s Bankruptcy Court granted the order and announced the restructured business would be managed by the Fahrenheit LLC consortium, including Arrington Capital as it shifts focus to Bitcoin mining and staking fees earned by validating blockchain transactions.
The crypto lending platform – once valued at $3 billion – is expected to come out of the Chapter 11 protection it was forced into last year by the first quarter of 2024.
Arrington Capital founder Michael Arrington explained his involvement was due to a strong belief that Celsius’ implosion was unlike other crypto company collapses in that it had the ability to restructure, reorganise and revive.
“Today marks the culmination of a journey that has been far too long and far too expensive for Celsius creditors,” he explained.
“We are eager to dig in on our go-forward plan to make things whole for our creditors.”
It is understood Fahrenheit will purchase a stake in the renewed platform before publicly listing its stock on Nasdaq in order to allow customers to sell the equity shares given to them during the bankruptcy recovery process.
Cryptocurrency worth roughly $2 billion will be returned to Celsius account holders, of which there are believed to be around 600,000 with a total investment of $4.4 billion at the time of the bankruptcy filing in July 2022.
Once reorganised, the new company will then pursue a claim against Alex Mashinsky, the founder of Celsius. The Ukranian-born 58-year-old has already pleaded ‘not guilty’ to charges of misleading customers and inflating the value of the CEL token.