The bankrupt crypto lending company Celsius could issue a new token to pay creditors, according to a Bloomberg report on Jan. 24. The news cites a video of a court hearing as a source of the information.
According to the news, Celsius’ lawyer, Ross M. Kwasteniet, told the court that the company is negotiating with its creditors how to relaunch the platform and pay them properly. The new, relaunched version would be “a duly chartered, publicly traded company,” which could supposedly bring more money to creditors than simply liquidating the company. If approved by creditors and the court, the reorganized company would “issue a new token to creditors as part of a payment plan.”
The news claimed that details of the plan will be filed with the court later this week.
Twitter user “CelsiusFacts”, who often tweets updates on the case, also claimed to have found details of the reorganization plan. According to a January 24 statement, Celsius Network intends to go public and use “third-party services” to ensure it complies with US financial regulations. Users will be able to withdraw up to USD 7,500 or 95% of the total, whichever is less. The new token would be issued to cover the remaining 5% or amounts greater than USD 7,500.
BREAKING NEWS
– #CelsiusNetwork is looking at having a stratified recovery smaller holders bellow 5k might get all assets to leave.
– Larger holders will get a debt token that seems to represent all the value, so you can sell if you don’t believe in the company or recovery.— CelsiusFactsNumbers (@CelsiusFacts) January 24, 2023
The court calendar for the case shows that an “Omnibus Hearing” was scheduled for January 24, and the agenda was released by the court before it occurred. This hearing may have been the source of both Bloomberg and “CelsiusFacts” news, although Cointelegraph has not been able to confirm this at press time.
Celsius blocked user withdrawals in June 2022, citing a lack of liquidity caused by “extreme market conditions.” In July, he filed for bankruptcy. On January 5, the New York attorney general filed a lawsuit against Celsius founder Alex Mashinsky for allegedly “false and misleading statements” to investors.
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