Bankrupt crypto lending firm Celsius has found a way to fund its proposed relaunch, according to reports from Bloomberg on Oct. 2.
Christopher S. Koenig, a lawyer for Celsius, said during bankruptcy proceedings that the company intends to exit bankruptcy with $450 million in seed funding.
That funding will come from Fahrenheit LLC, a group of companies that is otherwise highly involved in Celsius’ bankruptcy case. Fahrenheit won the bidding process on Celsius’ assets in May 2023; voting on that asset sale took place in August.
The revived version of Celsius reportedly will operate as “user-owned Bitcoin miner,” leaving the fate of the company’s once-central lending business uncertain.
Celsius may be able to more effectively compensate customers and creditors if its revival plan is successful. Though Celsius expects to distribute $2 billion of cryptocurrency, it also intends to provide creditors with stock in the new company — plus stake in litigation against former Celsius CEO Alex Mashinksy and other executives.
Celsius aims to begin repaying users by the end of 2023. That target date has been in place since June when the firm reached various related settlements.
Revival plan has developed since August
Bloomberg previously reported that Celsius aimed to relaunch its firm in August, at which time the firm began to poll customers on that course of action. On Sept. 26, Celsius announced that 95% of customers voted to accept the recovery plan.
Bloomberg’s latest report suggests that some parties remain in opposition: one creditor, which is owed $82 million, believes advisers have overvalued the new firm.
It should also be noted that Celsius and its customers cannot act alone. Securities regulators and the bankruptcy judge will ultimately need to approve the plan.
Plans for Celsius’ reopening otherwise developed in September as former Algorand leader Steven Kokinos joined the revival company as CEO, and as Arrington Capital CEO and TechCrunch founder Michael Arrington stepped down from the board.
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