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Celsius to transition into a Bitcoin mining NewCo following SEC feedback



In a recent development, Celsius, a troubled crypto lender, aims to emerge from Chapter 11 and transition into a Bitcoin mining-focused company. However, this new plan deviates from the initial reorganization plan.

Previously, Celsius, the crypto lender, received confirmation from the U.S. Bankruptcy Court for its plan. However, it received feedback from the Securities and Exchange Commission (SEC) that prompted these recent changes.

Following the SEC’s feedback on “certain aspects of the Plan,” Celsius now plans to initiate the share registration process. The new company will be a publicly traded Bitcoin mining company called “Mining NewCo.” This company will be owned by Celsius customers.

This, however, was the primary focus of the new company (Fahrenheit NewC0) proposed by Fahrenheit, LLC.  Based on SEC feedback, the Debtors and the Official Committee of Unsecured Creditors have decided to retain certain assets, initially intended for transfer to Fahrenheit NewCo, due to regulatory reasons. These assets will be managed and monetized under Celsius’s estates as part of the Plan.

Fahrenheit Holdings will handle the implementation of Celsius’s Plan. The firm successfully won the bid to acquire Celsius in May. Currently registered in Delaware, the new company will be referred to as NewCo. However, Celsius may assign a different name to the new company, as “NewCo” is often used as a temporary descriptor before an official name is chosen.

According to the Court document, the former crypto lender is currently in discussions about the terms and conditions for the future management of Mining NewCo. The filing specifically mentioned that the fees and incentives for the operators of Mining NewCo are expected to be lower than those associated with Fahrenheit NewCo. It also stated that there will be a greater amount of liquid cryptocurrency available for distribution directly to customers compared to what would have been distributable under Fahrenheit NewCo.

In addition, the Debtors plan to seek modification approval from the Bankruptcy Court to accommodate the new Mining NewCo transaction. Fortunately, there will be no need to resolicit the plan, and the Debtors still anticipate that creditors’ repayment will begin in January 2024.

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