Ahmed Ali Judge Martin Glenn, presiding over the bankruptcy case of Celsius Network, has urged the United States Securities and Exchange Commission (SEC) to promptly determine the legality of a proposal that aims to convert the defunct cryptocurrency lending platform into a bitcoin mining operation, according to Bloomberg.
In a hearing held on Monday, Judge Glenn addressed an attorney for the SEC, expressing his desire for a speedy resolution. He emphasized that both Celsius Network and its creditors have made significant progress in the Chapter 11 bankruptcy process. Glenn was cited as saying:
The SEC is expected to make its decision based on its own judgment of what is right. My hope is that the process will proceed without unnecessary delays, so that any obstacles can be addressed and resolved along the way.
The proposed repayment scheme aims to partially reimburse account holders whose funds have been inaccessible since before the company declared bankruptcy in June 2022. The plan involves compensating these customers with a combination of cryptocurrency assets and equity in the newly formed crypto mining enterprise. This new entity is slated to be managed by Arrington Capital, according to the report.
However, Judge Glenn clarified that his forthcoming ruling would still require approval from the SEC to take effect. Should the plan to transition the business as proposed in the Chapter 11 proceedings fail, the cryptocurrency company may face liquidation.
While the repayment plan has received substantial backing from creditors, it is encountering resistance from a portion of Celsius Network’s customer base. Some customers argue in favor of liquidation, believing that this approach would yield higher returns in cryptocurrency rather than equity in a nascent company yet to establish its market viability. Additional concerns have been raised regarding the fees paid to consultants specializing in bankruptcy who are instrumental in garnering creditor support for the proposal.
Earlier in July this year, the SEC initiated legal action against the now-insolvent cryptocurrency lender. The suit alleges that both the company and its former CEO, Alexander “Alex” Mashinsky, engaged in deceptive practices related to their “Earn Interest Program,” and misled investors about the financial stability of the business. The SEC further highlighted that investors were unable to withdraw billions of U.S. dollars’ worth of crypto assets as the firm began to falter.
Regarding the likelihood of the SEC approving the restructuring and repayment plan, any projections would be speculative at this point and it remains a matter to be decided by the regulatory body.
(Note: This article is written in accordance with the request for a formal and serious tone. No opinions have been added, and the information has been presented as factually as possible based on existing data as of the cutoff date in January 2022.)
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Frequently Asked Questions (FAQs) about Celsius Network SEC Decision
What is the main issue that Judge Martin Glenn is urging the SEC to decide upon?
Judge Martin Glenn is urging the U.S. Securities and Exchange Commission (SEC) to make a prompt decision on whether to approve Celsius Network’s proposal to transform into a Bitcoin mining company as a part of its Chapter 11 bankruptcy exit strategy.
What is the proposed repayment plan for Celsius Network’s creditors?
The proposed repayment plan aims to partially reimburse Celsius Network’s account holders whose funds have been frozen since before the company filed for bankruptcy in June 2022. The compensation would be in the form of both cryptocurrency assets and shares in the newly formed crypto mining entity.
Who is expected to manage the new crypto mining entity?
Arrington Capital is expected to lead the management team of the new crypto mining entity that would be formed if the Celsius Network’s proposal receives approval.
What obstacles does the proposed repayment plan face?
The repayment plan, although widely supported by creditors, faces resistance from some of Celsius Network’s customers. These customers prefer liquidation, as they believe it would provide them with more cryptocurrency assets instead of shares in a new, yet unproven, entity.
What legal actions has the SEC taken against Celsius Network?
In July of the current year, the SEC filed a lawsuit against Celsius Network and its former CEO, Alexander “Alex” Mashinsky. The agency accuses them of making fraudulent promises related to their “Earn Interest Program” and misleading investors about the financial health of the company.
What happens if the SEC does not approve the proposed restructuring plan?
If the SEC does not approve the restructuring and repayment plan, Celsius Network could face liquidation as a part of its Chapter 11 bankruptcy proceedings.
Are there any concerns about fees in the bankruptcy process?
Yes, some concerns have been raised about the fees paid to bankruptcy advisers, who have been instrumental in gathering creditor support for the proposed repayment plan.
More about Celsius Network SEC Decision
- Bloomberg Report on Judge Glenn’s Urging for SEC Decision
- SEC Lawsuit Against Celsius Network
- Chapter 11 Bankruptcy Explained
- Role of Arrington Capital in the New Entity
- Details on Celsius Network’s “Earn Interest Program”
8 comments
so they want to switch from lending to mining? Sounds like a desperate move to me.
whats this Chapter 11 thing? is it like game over for Celsius?
If SEC approves this, it could set a precedent for other failing crypto companies. Should be interesting to watch.
I’ve got money stuck in there since they filed for bankruptcy. really hoping this plan gets approved. But shares in a new company? Not sure how to feel.
Intriguing to see Judge Glenn pushing for a quick SEC decision. usually, these things take forever.
Wow, Celsius really going for a transformation huh? Good luck getting SEC’s nod though.
Celsius is in hot water, and now they wanna pivot. Well, let’s see if SEC plays along. they’ve been cracking down hard on crypto lately.
Arrington Capital stepping in as management, huh? That could actually give this new entity some credibility.