Celsius to Ditch Staking Plans and Focus on Mining
Reading Time: < 1 minuteCelsius has restructured its post-bankruptcy plans, opting exclusively for Bitcoin mining and abandoning staking
The decision is due to regulatory concerns raised by the SEC over whether staking equates to a securities contract
Celsius will focus instead on ramping up its existing Bitcoin mining operations
Crypto lender Celsius Network has revised its post-bankruptcy plans to ditch staking and focus exclusively on Bitcoin mining due to regulatory concerns. Celsius, which recently exited bankruptcy, originally intended to stake coins for users and manage crypto loans as well as mining bitcoin, but the feedback from the Securities and Exchange Commission (SEC) prompted a shift away from staking. The SEC has previously stated that staking contracts constitute a security and so any crypto platform wanting to offer them needs to register with it first.
Celsius Wants to Avoid SEC Entanglements
Celsius creditors voted to approve the company’s reorganization plan in September, which had initially included a staking facility, a process that sees users earn cryptocurrency in return for depositing their coins as collateral as they help secure the network. However, the SEC has made noises that suggest it views staking as a securities contract, leading to potential lawsuits down the road for those who offer it (Coinbase has already said it will defend staking in court if necessary).
While the SEC didn’t definitively rule on Celsius’ plans during its bankruptcy case, it reserved the right for future determinations, which clearly gave its new owners, Novawulf, the jitters. It will now ditch its staking option and focus on Bitcoin mining, something the company was already doing prior to its collapse in July last year.
Celsius is in negotiations with Fahrenheit, a consortium chosen to lead the reorganized company, with court approval expected soon, some 18 months after its collapse.
The post Celsius to Ditch Staking Plans and Focus on Mining appeared first on FullyCrypto.
Filed under: Bitcoin - @ November 22, 2023 10:20 am