Crypto ऋणदाता सेल्सियस नेटवर्क को दिवालियापन से बाहर निकलने की मंजूरी मिल गई

Crypto ऋणदाता सेल्सियस नेटवर्क को दिवालियापन से बाहर निकलने की मंजूरी मिल गई

Crypto Lender Celsius Network Cleared to Exit Bankruptcy

Crypto lender Celsius Network has been cleared to exit bankruptcy after a judge approved its restructuring plan. The plan will return cryptocurrency to customers and create a new company owned by Celsius creditors.

  • Technology
  • 276
  • 10, Nov, 2023
Sarthak Varshney
Sarthak Varshney
  • @SarthakVarshney

Crypto lender Celsius Network has been cleared to exit bankruptcy after a judge approved its restructuring plan. The plan will return cryptocurrency to customers and create a new company owned by Celsius creditors.

Celsius filed for bankruptcy in July 2022 after it could not meet customer withdrawal requests. The company had been facing liquidity problems due to a combination of factors, including the decline in cryptocurrency prices and the collapse of other crypto lenders.

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The restructuring plan that was approved by the judge will return cryptocurrency to customers in a phased approach. In the first phase, customers will receive a portion of their cryptocurrency back in the form of a new token called the Celsius Recovery Token (CRT). The CRT will be pegged to the US dollar and will be redeemable for cryptocurrency at a later date.

In the second phase, customers will receive the remaining portion of their cryptocurrency back in the form of the native cryptocurrency of the new company, which will be called Celsius Newco. Celsius Newco will be a publicly traded company that will focus on mining Bitcoin and earning staking fees.

The restructuring plan also includes a provision for creditors to own a majority stake in Celsius Newco. This means that creditors will have a significant say in the company's future direction.

The approval of the restructuring plan is a positive development for Celsius customers and creditors. It means that customers will be able to get their cryptocurrency back, and creditors will have an opportunity to recover their losses.

However, it is important to note that the restructuring plan is not without its risks. The cryptocurrency market is volatile, and there is no guarantee that the value of the CRT or the Celsius Newco cryptocurrency will increase. Additionally, the new company will face a number of challenges, including competition from other crypto lenders and the need to comply with increasingly stringent regulations.

Overall, the approval of the Celsius restructuring plan is a positive step forward for the company and its stakeholders. However, it is important to be aware of the risks involved before investing in the new company or its cryptocurrency.

Analysis

The approval of the Celsius restructuring plan is a significant development for the cryptocurrency industry. It is the first time that a major crypto lender has been able to successfully emerge from bankruptcy. This could serve as a precedent for other crypto lenders facing financial difficulties.

The restructuring plan is also notable for the fact that it gives creditors a majority stake in the new company. This is a significant departure from the traditional bankruptcy process, in which creditors typically lose the money that they have invested in a company. The fact that creditors are being given a stake in the new company could help to attract investment and support for the company going forward.

However, it is important to note that the Celsius restructuring plan is not without its risks. The cryptocurrency market is highly volatile, and there is no guarantee that the value of the CRT or the Celsius Newco cryptocurrency will increase. Additionally, the new company will face a number of challenges, including competition from other crypto lenders and the need to comply with increasingly stringent regulations.

Conclusion

The approval of the Celsius restructuring plan is a positive development for the company and its stakeholders. It is a sign that the cryptocurrency industry is maturing and that there is growing acceptance of bankruptcy as a way for companies to restructure and emerge from financial difficulties. However, it is important to be aware of the risks involved before investing in the new company or its cryptocurrency.

Sarthak Varshney

Sarthak Varshney

  • @SarthakVarshney