Celsius' Bankruptcy Nears End as Creditors Approve Reorganization Plan

Most of the classes in the bankruptcy claim voted by more than 98% in favor of the reorganization.

AccessTimeIconSep 26, 2023 at 6:26 a.m. UTC

Bankrupt crypto lender Celsius' creditors have voted to approve a plan that would return 67%-85% of holdings back to them, according to a voting declaration filing by restructuring specialist Stretto that awaits final approval from the court.

There have been objections to the plan, including from the U.S. Trustee. The U.S. Bankruptcy Court for the Southern District of New York will hold a confirmation hearing for final approval on Oct. 2. The Judge overseeing the case had approved the voting procedure in August 2023.

Most of the classes in the bankruptcy claim were passed by more than 98% votes in favor of the reorganization that would also see the sale of assets to crypto consortium Fahrenheit Holdings that includes Arrington Capital and miner U.S. Bitcoin Corp. Fahrenheit won a bid to acquire the insolvent lender Celsius Network in May 2023.

The overwhelming vote marks another step towards the end of Celsius' bankruptcy and the return of funds to customers. Celsius filed for bankruptcy in July last year as the crypto winter set in and its Chief Executive Officer Alex Mashinsky resigned as CEO in September 2022. In July 2023, Mashinsky was arrested on fraud charges and for manipulating the price of the CEL token, which he has denied.

As Mashinsky was arrested, Celsius made a $4.7 billion settlement with the U.S. over fraud allegations and said this would not affect reorganization plans. Mashinsky was later released on a $40 million bond, and a court recently ordered his banking and real estate assets frozen.

Jack Schickler contributed to reporting.

Edited by Parikshit Mishra.


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Amitoj Singh

Amitoj Singh is a CoinDesk reporter.