February 5, 2023

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 showed interest in the auction. 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 Glenn (MartinGlenn, who handles bankruptcy cases, that the reorganization of Celsius and obtaining a license will 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 lower rate, Kvasteniet is sure. Celsius is already in talks with various lenders about setting up a new company and a plan to cover losses using the new token.

This week Celsius will file documents with the court withdetails of your reorganization plan. It will also be voted on by Celsius creditors and customers who have crypto assets left on the platform. In deciding on the Celsius proposal, the court must take into account the results of that vote.

Recall that in October the court published a documenton 14,532 pages of financial information about Celsius clients, raising their privacy concerns. In addition, the New York State Attorney General's Office recently accused former Celsius CEO Alex Mashinsky of fraud and defrauding more than 26,000 New Yorkers.