Celsius Token Holders Lose Bid to Hike CEL Valuation

Some creditors of the bankrupt crypto lender argue it should be valued at a higher $0.80, the nominal price when the company collapsed, despite allegations of market manipulation

AccessTimeIconAug 25, 2023 at 1:51 p.m. UTC
  • A bid to value CEL tokens at $0.80, the list price on bankruptcy day, failed.
  • If creditors vote in favor, a wind-up plan will now proceed with a lower $0.25 valuation

Holders of Celsius’ native token have failed in a bid to argue CEL should be valued at $0.80, the trading price on the day the crypto lender filed for bankruptcy in July 2022, said a judgment issued by New York bankruptcy court issued Thursday.

Trading prices don’t reflect reality because the market for CEL was manipulated, and the court could even have valued it at a lower or zero price on a par with what stockholders could expect in bankruptcy, the company argued in opposition to the token holders.

Two token holders, Santos Caceres and Otis Davis, lobbied the court to be able to take part in the bankruptcy negotiations via a special committee of CEL holders, which Judge Martin Glenn also rejected.

“Nothing in the motions, this order, or announced at the hearing, constitutes a finding under the federal securities laws as to whether crypto tokens or transactions involving crypto tokens are securities,” Glenn said, seeking to avoid intervening in a heated dispute with the Securities and Exchange Commission over the regulatory status of CEL and other cryptoassets.

Celsius’ management have proposed to value CEL at $0.25, as they seek to wind up the companies’ affairs, hasten a sale to crypto consortium Fahrenheit, and return funds to creditors. That valuation, itself a raise from a previous $0.20, appeared in a disclosure statement related to the sale to Fahrenheit which was approved by Glenn last week.

In January, Shoba Pillay, an independent examiner Glenn appointed, said the market in CEL was largely created by the company itself, to the profit of insiders such as then-Chief Executive Officer Alex Mashinsky. Regulators have since arrested Mashinsky on charges including market manipulation, to which he has pleaded not guilty.

Creditors have one month to consider and vote on the sale plan.

Edited by Nikhilesh De.


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Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.