Celsius Network has received approval from a New York judge for a restructuring plan that will repay customers’ assets through new company owned by Celsius creditors and managed by Fahrenheit.
US Bankruptcy Judge Martin Glenn signed off on the restructuring on Thursday. Fahrenheit will pivot the business to pay back customers through bitcoin mining and earning "staking" fees by validating blockchain transactions, according to Reuters.
Celsius Network filed for bankruptcy last July, after freezing customer accounts the month prior. Since then, it was revealed that former executive cashed out $21 million before bankruptcy. Additionally, former CEO Alex Mashinsky was sued by New York’s attorney general and arrested on fraud charges, but has pleaded not guilty. His trial is set for September 2024.
Fahrenheit won the bid to manage the new company in May. The new company will be funded by $450 million in crypto held by Celsius and a $50 million investment by Fahrenheit.
Despite this plans approval by the Glenn, Blockworks reports the Securities and Exchange Commission (SEC) will also have sign off on this plan and proposed listing of the new company. Additionally, the SEC will be given the opportunity to “challenge” any crypto asset transactions they deem to involve securities.