New ‘Celsius token’ may be used to repay creditors: report

Bankrupt crypto lending firm Celsius may issue its own token to repay creditors, according to a January 24 report from Bloomberg. The report cites a video court hearing as the source of the information.

According to the report, Celsius attorney Ross M. Kwasteniet told the court that the firm is negotiating with its creditors on how to relaunch the platform and adequately pay them back. The new, relaunched version would be “a publicly-traded company that is properly licensed,” which could allegedly provide more money for creditors than simply liquidating the company. If approved by creditors and the court, the reorganized company would “issue a new token to creditors as part of a payout plan.”

The report stated that details of the plan will be filed with the court later this week.

Related: Opinion: Digital Currency Group’s Genesis implosion: What comes next?

Twitter user CelsiusFacts, who often tweets updates about the case, also claimed to have found details of the reorganization plan. According to a statement on January 24, Celsius Network intends to become publicly traded and use “third party services” to ensure that it complies with U.S. financial regulations. Users may be able to withdraw up to $7,500 worth of claims or 95% of the total, whichever amount is smaller. The new token would be issued to cover the remaining 5% or amounts above $7,500.

The court schedule for the case shows that an “Omnibus Hearing” was scheduled for January 24, and the agenda was released by the court before it occurred. This hearing may have been the source of the reports from both Bloomberg and @CelsiusFacts, although Cointelegraph has not been able to confirm this at time of publication.

Celsius blocked user withdrawals in June 2022, citing a lack of liquidity caused by “extreme market conditions.” In July, it filed for bankruptcy. On Jan. 5, the New York Attorney General filed suit against Celsius founder Alex Mashinsky for allegedly giving “false and misleading statements” to investors.

All Dutch and English crypto news!

UK’s digital pound would modernize payments but won’t replace cash: Minister

The Bank of England (BoE) and U.K. Treasury are gearing up plans to create a digital currency that could "provide a new way to pay"...

Yuga Labs settles lawsuit with developer involved in copycat BAYCs

The creator of the nonfungible token (NFT) collection Bored Ape Yacht Club has settled a lawsuit with one of the developers behind a copycat collection...

‘Haunts me to this day’ — Crypto project hacked for $4M in a hotel lobby

The co-founder of Web3 metaverse game engine "Webaverse" has revealed they were victims of a $4 million crypto h after meeting with scammers posing as...

Crypto firms could face 2 years jail for breaching UK advertising laws

Newly proposed advertising rules in the United Kingdom could potentially see executives of crypto firms face up to two years of prison for failing to...

Beste exchanges

Koop je crypto bij Bitvavo