Crypto Lender Celsius Network Approved to Exit Bankruptcy; Begins Restructuring Plan to Reimburse Creditors with Cryptocurrency and Newly-Originated Company Shares

Bankruptcy restructuring allows for $2 billion in cryptocurrency asset returns to customers and the formation of a creditor-owned mining company; litigation against Celsius founder Alex Mashinsky for alleged misconduct continues.

• Celsius Network, once valued at $3 billion, has been given bankruptcy court approval to reorganize and exit bankruptcy. The restructured business will be managed by a consortium called Fahrenheit LLC, focusing on mining new Bitcoin and validating blockchain transactions.
• The New Jersey-based crypto lender had filed for Chapter 11 protection in July 2022 after freezing customer accounts one month prior. This restructuring plan sets Celsius apart from other crypto companies that faced similar bankruptcies but failed to reorganize, such as BlockFi and Voyager Digital.
• As part of their bankruptcy recovery, Celsius’s 600,000 customers will be given partial repayment of the cryptocurrency assets they deposited, which were worth around $4.4 billion at the time of the bankruptcy filing. The plan also includes a settlement valuing Celsius's proprietary crypto token, CEL, at 25 cents.
• Fahrenheit LLC will be buying a minority stake in the restructured Celsius for $50 million and will publicly list the new company's stock on Nasdaq. This move will provide Celsius customers the opportunity to sell equity shares they receive as part of their bankruptcy recovery.
• The reorganized company will be pursuing litigation against Celsius founder Alex Mashinsky, who is facing US criminal charges and a New York civil lawsuit for allegedly misleading customers and artificially inflating the value of CEL. Mashinsky has pleaded not guilty.

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