SEC Inquiry Stalls Celsius Bankruptcy Recovery Plan

According to Coincu, the Celsius bankruptcy recovery plan is facing challenges as the U.S. Securities and Exchange Commission (SEC) seeks additional information on the lender's assets. The SEC's request for more details has prompted discussions between the parties involved, including the Celsius Creditors Committee and Fahrenheit, an investment vehicle that secured the right to issue shares in the new venture following a bidding contest in May. Fahrenheit, comprising Arrington Capital, U.S. Bitcoin Corp., and Proof Group, received court approval for the Celsius bankruptcy recovery plan earlier this month, overcoming Celsius's Chapter 11 bankruptcy protection filing in July 2022, which exposed a $2 billion deficit in its balance sheet. Judge Martin Glenn of the Southern District of New York Bankruptcy Court confirmed on Nov. 9 that Celsius creditors overwhelmingly approved the bankruptcy plan on Sept. 27. As per the approved Celsius bankruptcy recovery plan, approximately $2 billion in Bitcoin and Ether will be distributed to Celsius creditors, along with equity in the newly formed entity (NewCo). The company aims to commence creditor reimbursement by year-end. NewCo is slated to manage and expand Celsius's Bitcoin mining operations, stake Ethereum, liquidate other illiquid assets, and explore new business opportunities, as outlined in the court filing.