{"id":3472,"date":"2023-12-31T07:58:19","date_gmt":"2023-12-31T07:58:19","guid":{"rendered":"https:\/\/ethereumcode.io\/bankruptcy-judge-celsius-bitcoin-mining-transition\/"},"modified":"2023-12-31T07:58:19","modified_gmt":"2023-12-31T07:58:19","slug":"bankruptcy-judge-celsius-bitcoin-mining-transition","status":"publish","type":"post","link":"https:\/\/ethereumcode.io\/bankruptcy-judge-celsius-bitcoin-mining-transition\/","title":{"rendered":"Bankruptcy Judge Approves Celsius Transition to Bitcoin Mining"},"content":{"rendered":"
In a pivotal move indicative of the dynamism of the cryptocurrency industry, the former crypto lender Celsius has obtained authorization to venture into bitcoin mining. Amidst considerable regulatory hurdles and a drastically altered strategy plan, US District Judge Martin Glenn of Manhattan granted the organization approval for its novel move. Initially, Celsius’s proposed shift had been met with significant barriers from the United States Securities and Exchange Commission.<\/p>\n
Despite initially being given the green light for its restructuring plan, Celsius faced considerable resistance from the U.S. securities watchdog. On November 20, 2023, the company made public its plan to focus solely on bitcoin mining. Responding to feedback from the SEC, Celsius unveiled plans to begin registering shares in its brand-new, customer-owned public Bitcoin mining entity, Mining Newco.<\/p>\n
In a pivotal turn of events this week, Judge Martin Glenn authorized Celsius’s revised proposal to morph into a Bitcoin mining company. The debtors of Celsius expect that the overall costs and economic incentives associated with operating Mining Newco will significantly undercut those related to the prior Fahrenheit agreement.<\/p>\n
According to the debtors, this new arrangement would create a larger pool of liquid cryptocurrency for direct customer distribution compared to the situation had the Fahrenheit agreement been maintained. The Celsius estate, upon declaring the shift, stated that the interim CEO of Celsius, Chris Ferraro, expressed to Reuters the significant implications of the judge’s approval for the creditors of Celsius. <\/p>\n
Maintaining a commitment to distribute cryptocurrency expeditiously to customers, Ferraro suggested Celsius is likely to be out of Chapter 11 bankruptcy by early 2024. It’s worth noting that in mid- July 2022, Celsius sought protection under bankruptcy, halting customer withdrawals a month later.<\/p>\n
Unfortunately, in mid-July 2023, charges of fraud were leveled against Celsius founder, Alex Mashinsky. He was accused of running “a scheme to defraud customers of Celsius through a series of false claims about the fundamental safety and security of the Celsius platform”.<\/p>\n