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Celsius Network, a <\/span>bankrupt digital asset lender<\/span><\/a>, has revealed plans to begin repaying creditors using billions of dollars in crypto assets before the year\u2019s end.\u00a0<\/span><\/p>\n The company presented a restructuring plan, outlined in a recent <\/span>filing <\/span><\/a>to a US bankruptcy court, which aims to generate funds for a new corporate spinoff known as \u201cNewCo\u201d and facilitate customer repayments.<\/span><\/p>\n According to the filing, the plan outlines a distribution of at least $2.03 billion in cryptocurrency to creditors, with the actual amount subject to fluctuations in the cryptocurrency market.\u00a0<\/span><\/p>\n This distribution will occur as soon as reasonably practicable after the plan becomes effective, either through the NewCo transaction or an orderly wind down. T<\/span>he NewCo transaction, sponsored by the Fahrenheit Group, is a key component of the plan.\u00a0<\/span><\/p>\n It involves the creation of a new cryptocurrency company owned by customers, focusing on Bitcoin mining and staking. NewCo, which aims to maximize liquidity by listing on NASDAQ, will be managed by experienced crypto-native operators from Fahrenheit.\u00a0<\/span><\/p>\n The group has committed to injecting up to $50 million as an equity stake in NewCo, aligning the interests of Fahrenheit and creditors who will own shares in the new company.<\/span><\/p>\n In the event that the NewCo transaction cannot be completed, the plan includes an orderly wind-down option that would provide creditors with better recoveries compared to a Chapter 7 liquidation.<\/span><\/p>\n Celsius\u2019s legal representative, Christopher S. Koenig, also <\/span>revealed <\/span><\/a>that the restructured company, expected to emerge from Chapter 11, will receive $450 million in capital and financial backing.\u00a0<\/span><\/p>\n However, the focus remains on the successful execution of the NewCo transaction, which would mark a significant milestone as the first revival of a failed crypto platform under Chapter 11, following the industry\u2019s wave of insolvencies last year.<\/span><\/p>\n While the approval of Celsius\u2019s plan is under deliberation by Judge Martin Glenn, some <\/span>customers <\/span><\/a>who have been unable to access their funds have expressed opposition.\u00a0<\/span><\/p>\n Additionally, an affiliate of Lantern Ventures owed approximately $82 million, has challenged the plan, claiming overvaluation of the new business by Celsius\u2019s advisors. Clearance from securities regulators will also be necessary for the new venture.<\/span><\/p>\n It is important to note that if the new company were to fail, liquidation could become a possibility, potentially resulting in<\/span> lower repayments<\/span><\/a> for customers.\u00a0<\/span><\/p>\n Nonetheless, Celsius Network\u2019s proposed plan represents a significant effort to repay creditors and potentially revitalize the company, providing hope for both the cryptocurrency industry and affected stakeholders.<\/span><\/p>\nCelsius Vows To Clear $2 Billion Debt<\/span><\/h2>\n