April 25, 2024

Celsius plans to issue a token to pay damages to affected customers

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Celsius plans to issue a token to pay damages to affected customers

Bankrupt cryptocurrency lender Celsius Network is exploring the possibility of issuing a token as part of a restructuring to pay off debt to affected users.

Last July, Celsius filedfiling for “immediate” bankruptcy. The auction for the sale of Celsius assets was scheduled for January 10, and more than 120 organizations expressed interest in bidding. However, as Celsius lawyer Ross M. Kwasteniet said during the court hearing, the individual asset offerings were not attractive to the platform.

The lawyer explained to Judge Martin GlennGlenn, who handles bankruptcy cases, said that reorganizing Celsius and obtaining a license would allow the company to resolve the bankruptcy problem and pay out funds to users. This method will be more effective than selling Celsius assets at a reduced rate, Kvasteniet is sure. Celsius is already in talks with various lenders about forming a new company and a plan to cover losses using the new token.

Celsius will file documents in court this weekwith details of its reorganization plan. It will also be submitted for voting to Celsius' creditors and clients who have remaining crypto assets on the platform. When deciding on Celsius's proposal, the court must take into account the results of this vote.

Let us recall that in October the court publisheda 14,532-page document containing financial information about Celsius' clients, raising their concerns about privacy. In addition, the New York State Attorney General's Office recently charged former Celsius CEO Alex Mashinsky with fraud and defrauding more than 26,000 New Yorkers.