U.S. Bankruptcy Judge Martin Glenn in Manhattan has approved cryptocurrency lender Celsius Network's transition to bitcoin mining.

The ruling permits Celsius to deviate from its previously approved bankruptcy plan, with the judge asserting that the restructuring does not harm creditors and customers.

From the conclusion found within the document -

For the reasons explained above, the Court finds that the MiningCo Transaction falls squarely within the terms of the confirmed Plan, and does not constitute a modification. But even if it were a modification, there is no material adverse effect on creditors, so re-solicitation would not be required. Accordingly, the Wind-Down Motion is GRANTED.

Celsius, one of several crypto lenders filing for Chapter 11 protection due its sudden collapse in 2022, faced setbacks with the U.S. Securities and Exchange Commission (SEC).

The shift also led to Celsius parting ways with external bidders initially selected to manage the new company.

Mining company US Bitcoin Corp, founded by Hut 8's Asher Genoot, now takes charge of the creditor-owned mining business, a change that some creditors and the U.S. Department of Justice's bankruptcy watchdog argued should prompt a new vote.

Shift in Sentiment

Despite initial sympathy expressed by Judge Glenn, who acknowledged that the mining plan differed from what creditors initially voted on, he ultimately approved the shift without requiring a fresh vote.

Celsius' interim CEO, Chris Ferraro, expressed optimism, calling it a "significant day for Celsius creditors," emphasising the commitment to promptly distribute cryptocurrency.

The company aims to emerge from bankruptcy in early 2024.

The revised bankruptcy plan also frees up $225 million in cryptocurrency assets initially earmarked for rejected business lines, leading to more cryptocurrency being returned to Celsius customers.

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These customers will also receive equity shares in the new bitcoin mining venture, according to Glenn.

Affected customers that qualify for any distributions within the Plan can expect to receive an email with further instructions in the next few weeks.

Celsius is Selling

Blockchain data indicates that Celsius has liquidated $250 million worth of digital assets, including Ethereum, within the last 30 days.

Blockchain analytical firm Peckshield confirmed the transfer of over 10,000 units of ETH, valued at approximately $24 million, to cryptocurrency exchange Coinbase and brokerage platform FalconX in the last week.

Celsius's balance, as a result, has seen a significant decrease since its heydays.