- Celsius, in a court hearing on Tuesday, stated reorganizing the company into a public company would recover more money than liquidation would.
- Bankruptcy Judge, Martin Glenn, directed Celsius that any new company plan will first go through creditors, including customers.
- Earlier this month, Celsius Mining issued a notice to sell its $1.3 million mining equipment.
Celsius is looking to follow in the footsteps of Bitfinex as it has begun planning a rehaul and relaunch of the platform. The company is looking to undo the damage done to its creditors by focusing on a new token instead of selling its hard-to-liquidate asset.
Celsius gives it another shot
Celsius' bankruptcy in July last year, along with Three Arrows Capitals' collapse, was the trigger of the first contagion of 2022. The effects of the same were experienced by customers and traders equally. The lending company is now attempting to repay its creditors by taking a rather unusual route when it comes to bankruptcy matters.
As per court proceedings from Tuesday, Celsius Network is actively considering exiting bankruptcy by issuing a new digital token. Along with this, the lending company also plans on reorganizing Celsiusto become a publicly traded company.
Per company attorney, Ross M. Kwasteniet, this transformation would allow Celsius to bring in more money for customers and creditors. This would ramp up the recovery speed as well since a properly licensed company would bring in more funds than hard-to-sell assets would.
At the time of writing, Celsius is planning on how to establish a new company and issue a new token. However, before moving forward with any plan, it would require the approval of the creditors of the exchange through a voting process.
Creditors, including customers of the platform, will be voting on whether the reorganization plan is approved or not, following which Judge Glenn will provide the green light to relaunch the platform.
Celsius attempts at recovery
While the Celsius Network is looking to restart the platform, Celsius Mining's arm earlier this month decided to sell its miners. Filing with the bankruptcy court, Celsius announced the sale of its equipment worth nearly $1.3 million. The 2,678 mining rigs were reported to be sold to Touzi Capital.
At the same time, Celsius founder and CEO, Alex Mashinsky, became the target of New York Attorney General, Letitia James. James filed a lawsuit against Mashinsky for defrauding hundreds of thousands of investors.
The attorney is seeking recovery of the losses suffered by investors as well as banning Mashinsky from ever conducting business in New York again.