NY Judge allows Celsius to mine and sell assets, but only Bitcoin, while it is in bankruptcy. This news developed less than a day after disclosing a three-month cash flow forecast that threatens to completely deplete all available money.
After reports of insolvency arose in July 2022, Celsius Networks has been in the crosshairs of American authorities, endangering the live savings of several cryptocurrency investors.
Last week many got very upset with me as I said @CelsiusNetwork would run out of money & solutions needed to be acted upon faster. I was told I don’t understand Chapter 11. They have now confirmed they run out of money by October. https://t.co/CyzjgKpId7 pic.twitter.com/vBIRIGEmG2
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) August 15, 2022
NY Judge Allows Celsius To Mine And Sell Bitcoin
The Southern District of New York’s Chief Bankruptcy Judge Martin Glenn granted Celsuis’ request to run BTC mining and selling operations in order to restore financial stability on the second day of the case hearing.
Glenn, however, raised questions about whether mining BTC would be immediately profitable given the significant upfront costs associated with building up the necessary equipment.
Today, alongside the Unsecured Creditors Committee (UCC), made up primarily of customers, the U.S. 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 community.
— Celsius (@CelsiusNetwork) August 17, 2022
However, the most recent approval is only valid for mining and selling Bitcoin. The court ordered the crypto lender to disclose information about the assets beforehand and prohibited Celsius from selling stock or loan stakes in other cryptocurrency enterprises.
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Concerns expressed by investors on the unfair results reported by more than 250 clients led to the decision to permit a defaulting cryptocurrency company to start conducting crypto mining activities, as indicated above.
The company’s counsel reassured investors that Celsius will make money from investing in mining despite worries that they may run out of money by October. After Celsius made it clear that company would only sell the mined Bitcoin for cash, the U.S. Department of Justice and the Texas State Securities Board likewise removed their opposition to its plans to go into Bitcoin mining.
Additionally, Celsius stated at the hearing that since the petition was filed, BTC prices have increased by 25%. Before Celsius’ departure and the allocation of monies, the plan will be finalized during the last hearing on September 1.
On August 8, the Singapore-based cryptocurrency lending platform Hodlnaut halted deposits and withdrawals due to unstable markets.
Hodlnaut claimed that he has started working on recovery plans shortly after announcing the suspension of services, including token swaps, and added:
“We are consulting with Damodara Ong LLC on the feasibility and timelines of our intended execution plan and are strategizing our recovery plan with our users’ best interests in mind.”
Hodlnaut suspended all of its social media accounts, except Twitter and Telegram.
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