Legal Green Light for Celsius: NewCo Emerges

Judge Martin Glenn, of the Southern District of New York Bankruptcy Court, has given the nod to Celsius Network’s reorganization plan, setting the stage for a substantial transformation.

The recent approval signals a significant step in the aftermath of Celsius’s bankruptcy filing in July 2022. The plan, endorsed by creditors on September 27, outlines a redistribution of around $2 billion in Bitcoin and Ethereum, coupled with shares in the freshly established entity, NewCo.

Under the aegis of the Fahrenheit consortium, NewCo is poised not just to inherit assets but to expand Celsius’s mining activities. The consortium, steeped in crypto expertise, includes Proof Group, making waves with its bid for the defunct FTX. This strategic transition comes at a time when former Celsius executives, including ex-CEO Alex Mashinsky, face legal challenges. Mashinsky is slated for a jury trial in September 2024 on multiple fraud charges, while Roni Cohen-Pavon, former chief revenue officer, awaits sentencing in December for fraud and price manipulation.

The future trajectory of NewCo is tethered to SEC clearance, introducing an additional layer of regulatory complexity. The SEC, no stranger to clashes with crypto enterprises, will oversee NewCo’s public listing. However, Judge Glenn’s confirmation order clarifies that this approval does not assert the SEC’s stance on crypto tokens and transactions falling under securities laws. The SEC reserves the right to scrutinize any crypto asset transactions under its purview.

In essence, Celsius’s bankruptcy plan approval marks a turning point, offering potential relief to affected customers. As NewCo embarks on its journey, regulatory hurdles and the looming shadow of legal battles necessitate a cautious approach. The industry awaits the SEC’s swift review, anticipating closure to a tumultuous chapter in Celsius’s history.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive.

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