Crypto lender Celsius is making its way out of bankruptcy after a New York judge approved a plan involving the use of a mining firm to pay back creditors.
"The Plan is confirmed pursuant to section 1129 of the Bankruptcy Code," Judge Martin Glenn said in an order on Thursday.
Creditors voted in September in favor of a plan, which would distribute about $2 billion worth of bitcoin and ether to creditors. A new company will build out its mining and staking operations, according to the plan, and be managed by the Fahrenheit Group, the consortium that made the winning bid to acquire Celsius’ assets in May.
Celsius filed for bankruptcy last year and owes billions of dollars to investors. The SEC sued Celsius and its former CEO Alex Mashinsky in July for allegedly raising billions through fraudulent and unregistered sales of "crypto asset securities," repeatedly lying to investors about Celsius' financial standing, and manipulating the price of CEL +14.40% , the company's native token.
Mashinsky and Celsius' former chief revenue officer were also charged by federal prosecutors on similar charges. Mashinsky's criminal trial is slated for Sept. 17, 2024.
Bloomberg reported that the new company would also have to be approved by the Securities and Exchange Commission and that Celsius could swivel to a liquidation if mining falls through. The publication also reported last month that Glenn hoped the SEC would decide on Celsius' plan soon.
"Notwithstanding anything to the contrary in this Confirmation Order, or any findings announced at the Confirmation Hearing, nothing in this Confirmation Order, or announced at the Confirmation Hearing, constitutes a finding under the federal securities laws as to whether crypto tokens or transactions involving crypto tokens are securities, and the right of the Securities and Exchange Commission to challenge transactions involving crypto tokens on any basis is expressly reserved," Glenn said.
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