In a momentous move, NovaWulf Digital Management and Celsius Network have come to an agreement that would enable the crypto lender to exit bankruptcy proceedings. The United States Bankruptcy Court has approved the arrangement for the Southern District of New York and obtained endorsement from Celsius’s Unsecured Creditors Committee (UCC). It is part of a broader strategy to revive both its retail platform and mining business.
Celsius to Start Paying off Debts in June
If permitted by the bankruptcy court and accepted by a majority of Celsius customers, NovaWulf’s deal would enable crypto owners to recover their digital assets in June. This means that users on the platform will obtain part of their staked bitcoin and ethers back. Unsettlingly, reports presented to the court revealed an enormous deficit of $1.2 billion in Celsius‘ balance sheet.
The debtors chose NovaWulf because they recognized the firm as having a stellar approach to liquidating their crypto assets and maximizing the value of their illiquid holdings with a newly established enterprise headed by accomplished asset managers. In addition, NovaWulf will be providing $45-55 million in direct cash funding for NewCo’s platform, compensating customers executing transactions on the said platform to cover expected gas expenses incurred and shouldering considerable liquidation costs that would otherwise fall onto the shoulders of debtors.
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Creditors With Less Than $5000 Can Get 70% Of Their Claims
Earn’s creditors are set to acquire a sizable liquid crypto payout, as the newly formed company NewCo will become an officially listed entity owned entirely by them. As its name implies, this new venture emerges from Earn’s prior enterprise activity.
Those creditors with less than $5,000 owed to Celsius Earn accounts will be given 70% of their funds as a one-time payment in either Bitcoin, Ethereum, or USDC stablecoin. Any creditor with an amount greater than $5,000 can reduce it and join this class. Meanwhile, those who are owned less than $1,000 have the option of opting out and receiving part of the recovered money – yet how much they receive is still undecided for Earn program participants.
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