NEW judge allows Celsius to mine, sell Bitcoin
Not even 24 hours after revealing a three-month cash flow forecast that threatens total exhaustion of funds, a New York judge allowed crypto lender Celsius Network to mine and sell Bitcoin (BTC) during bankruptcy.
Since July 2022, Celsius Networks has been in the crosshairs of US officials after reports of bankruptcy emerged, which risks losing the live savings of many crypto investors.
Last week, a lot of people got really mad at me, as I said @CelsiusNetwork would run out of money and solutions would have to be acted upon more quickly. I was told that I don’t understand Chapter 11. They have now confirmed that they will run out of money by October. pic.twitter.com/vBIRIGEmG2
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) 15 August 2022
During the second day of proceedings, Chief Bankruptcy Judge Martin Glenn, Southern District of New York, approved Celsuis’ request to conduct BTC mining and sales operations as a means of restoring financial stability.
However, Glenn raised concerns related to the immediate profitability of BTC mining, as he rightly pointed out the high upfront investment needed to set up mining infrastructure.
Today, together with the Unsecured Creditors Committee (UCC), which consists primarily of customers, the US Trustee and a number of other key parties, we participated in the Second Day Hearing where we continued the dialogue around Celsius’ efforts to maximize value for our communities.
— Celsius (@CelsiusNetwork) 17 August 2022
However, the recent approval is only limited to mining and selling mined BTC. The court barred Celsius from selling equity or debt investments in other crypto companies and required the crypto lender to disclose information about its assets in advance.
The decision to allow a defaulting crypto company to start crypto mining stems from the concerns raised by investors about the unfair outcomes submitted by over 250 customers – as shown above.
Despite fears of running out of money by October, the company’s lawyer confirmed that investment in mining will generate profits for Celsius. The US Department of Justice and the Texas State Securities Board, which previously opposed Celsius’ intention to delve into BTC mining, also withdrew their objection after Celsius clarified that it would only sell the mined Bitcoin for cash.
Celsius also revealed during the hearing that BTC prices have grown by 25% since the company filed the petition. The final hearing will take place on September 1, which will see the finalization of the plan before Celsius’ exit and distribution of funds.
Related: German crypto bank Nuri with 500,000 user files for insolvency
Singapore-based crypto-lending platform Hodlnaut suspended withdrawals and deposits on August 8, citing poor market conditions and a lack of liquidity.
Dear users, we regret to inform you that we will stop withdrawals, token exchanges and deposits immediately due to recent market conditions. We have also withdrawn our MAS license application. Here is our full statement Our next update will be August 19th.
— Hodlnaut (@hodlnautdotcom) August 8, 2022
Shortly after revealing the suspension of services, including token exchange, Hodlnaut announced that it had been working on recovery plans, adding:
“We are consulting with Damodara Ong LLC on the feasibility and timelines of our intended execution plan and are strategizing our recovery plan with the best interests of our users in mind.”
After the service was shut down, Hodlnaut suspended all of his social media accounts except for Twitter and Telegram.
