Celsius gets approval to sell mined Bitcoin to pay for operations

Troubled crypto lender Celsius Network has taken a break after the judge overseeing the firm’s bankruptcy case allowed it to sell newly mined Bitcoinper a law 360 report.

Judge Martin Glenn of the Bankruptcy Court for the Southern District of New York made the decision on Tuesday despite initial objections, including those related to the cost of Celsius’ Bitcoin mining.

Celsius Mining, a subsidiary of Celsius Network, joined the parent company in seeking Chapter 11 bankruptcy protection last month. Prior to that, Celsius sold the Bitcoin mined to fund the company’s operations, with the court’s approval now effectively giving the green light for it to proceed.

Celsius mined a total of 432.30 BTC (worth about $10.3 million at current prices) in July, according to a document filed ahead of the hearing. The company’s estimated operating and capital costs exceeded this amount.

Although Celsius’ filing shows that Bitcoin mining will initially be loss-making, Judge Martin Glenn said he would allow Celsius to continue selling mined Bitcoin as he was inclined to believe the company’s business judgment that the move would ultimately provide value to the customers. .

It could turn out to be very wrong, but we’ll see, he said.

Bitcoin mining as Celsius ‘core asset’

However, Celsius adviser Ross Kwasteniet explained that the initial losses are due to the fact that the firm only started mining last year and is still in the process of building the facility and acquiring mining machinery.

Kwasteniet also described Celsius’ Bitcoin mining operation as a “core asset”, adding that the company expects the financial situation to improve in the coming months once the setup is complete.

Those protesting the decision included the Texas State Securities Board. Later, the Lone Star State’s financial watchdog said it was satisfied with the approval since it was clarified that the mined Bitcoin would be sold for cash and not loaned or invested.

The attorney for the unsecured creditors’ committee, which last week moved to block Celsius from selling its mined Bitcoin, and the US Trustee’s Office also filed their objections, saying they were satisfied with the information Celsius had provided about the company’s finances and budget.

However, Shara Cornell of the US Trustee said the office remained opposed until it could obtain more information about the costs of the company’s mining operations.

“We need more information so we can make a reasonable decision,” Cornell said.