Celsius, a cryptocurrency lending platform, has revealed its intention to transform into a new entity with an exclusive emphasis on Bitcoin mining.

This change, disclosed in a recent court filing, represents a departure from its initial reorganization strategy, including a focus on staking.

Celsius Moves Towards Mining-Exclusive Entity

Following feedback from the U.S. Securities and Exchange Commission (SEC) regarding specific aspects of its plan, Celsius announced a shift in its reorganization strategy. Initially planning to focus on mining and staking, the crypto lending platform intends to transition solely into a new company dedicated to Bitcoin mining, as disclosed in a recent court filing.

Celsius is now registering shares for a new publicly traded Bitcoin mining company named ‘Mining NewCo,’ which will be owned by its own customers.

Previously, the reorganization plan had assigned the implementation responsibility to Fahrenheit Holdings, a consortium including Arrington Capital and U.S. Bitcoin Corp., following a successful bid in May 2023. The plan aimed to establish a new company, provisionally named NewCo, registered in Delaware, focusing on mining and staking.

Despite the shift in strategy, Celsius anticipates that distributions to creditors will commence in January 2024. The alterations to the plan will involve Celsius applying to register shares for the new Mining NewCo.

Additionally, certain assets initially intended to be transferred to Fahrenheit Holdings will now be retained by Celsius’ estates based on regulatory considerations. These assets will be administered and monetized by the Plan Administrator and/or Litigation Administrator for the benefit of creditors.

Celsius’ Plan to Recover Customer Funds

In July 2022, Celsius, a New Jersey-based company, sought Chapter 11 protection a month after implementing a freeze on customer accounts to prevent withdrawals. Once valued at $3 billion, Celsius experienced one of the most significant collapses in the crypto space last year.

Michael Arrington, the founder of Arrington Capital, highlighted earlier Celsius’ unique path to revival, distinguishing it from other crypto companies that faced collapse in 2022 and struggled to reorganize.

On November 9, Fahrenheit, a group led by Arrington Capital, announced its intention to acquire a minority stake in the restructured Celsius for $50 million. The plan involved publicly listing the new company’s stock on Nasdaq. This listing would enable Celsius customers to sell equity shares they receive as part of their bankruptcy recovery.

The innovative approach set Celsius’ revival apart from other crypto companies that faced challenges during the tumultuous events of 2022.

The post Celsius Announces Transition to Bitcoin Mining Focus appeared first on CryptoPotato.

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Filed under: Bitcoin - @ November 21, 2023 7:25 pm