Most of the creditors affected by the Celsius bankruptcy voted in favor of a reorganization plan. This new strategy would allow them to recover cryptocurrencies and receive shares in a new company. The U.S. Bankruptcy Court for the Southern District of New York will review the case and issue its final decision at a hearing scheduled for October 2. The plan calls for the debtors to distribute around $2 billion in bitcoins and ethers to creditors, in accordance with a letter issued by the group in August.

Creation of a new company to continue mining operations

The new company, dubbed "NewCo", will operate and further expand debtors' Bitcoin mining operations, with a focus on Ethereum. This entity will also be responsible for monetizing other illiquid assets held by debtors. It will develop new business opportunities compatible with current regulations in order to increase its value.

SEC lawsuit against Celsius and its former CEO

The Securities and Exchange Commission (SEC) filed a complaint against Celsius and its former CEO, Alex Mashinsky, last July. The company is accused of raising billions of dollars through fraudulent, unregistered sales of crypto securities. They are also accused of repeatedly lying to investors about the company's financial situation. Added to this is the manipulation of the price of CEL, the company's native token.

Key stages in the reorganization plan

The reorganization plan submitted to the vote of creditors has several main components:

• Cryptocurrency distribution: Debtors to pay around $2 billion in bitcoin and ether to aggrieved creditors.
• Creation of a new company (NewCo): This entity will be responsible for continuing Bitcoin mining operations and betting on Ethereum.
• Monetizing illiquid assets: NewCo will also have to find solutions for monetizing other assets held by debtors.
• Development of new business opportunities: Finally, this new company will have to develop new activities compatible with current regulations in order to increase its value.

Final hearing scheduled for October 2

The U.S. Bankruptcy Court for the Southern District of New York will be responsible for reviewing the case. It will issue a final decision on the plan at a hearing currently scheduled for October 2. If this plan is approved, creditors affected by the Celsius bankruptcy will be able to recover a significant portion of the money lost in the form of cryptocurrencies and shares in NewCo.

Conclusion

Celsius' situation shows how crucial it is for companies in the cryptocurrency sector to comply with current regulations. They also need to remain transparent with their investors. The majority of creditors supporting this reorganization plan can be interpreted as a positive sign for the future of this company. It is also a sign of hope for those who have suffered financial losses.