The bankrupt crypto lender Celsius Network is considering issuing a new token and reorganizing the company to make it a publicly traded company.
According to a Bloomberg report on Tuesday, January 24th, Celsius Network proposed a restructuring plan and a new token to compensate users in a video court hearing. The proposal is yet to be approved by the court and creditors.
Celsius New Token and Restructuring Plan
A Twitter account, CelsiusFactNumbers, posted some details of Celsius’ plan to restructure into a US-regulated publicly-traded company. In Tuesday’s court hearing, Celsius’s attorney told the court that the firm was in talks with creditors to relaunch the platform and pay them back.
According to the details of the restructuring plan, the company proposed a relaunch of the platform as a publicly traded, US-regulated company once bankruptcy proceedings are completed. The company believes this will enable it to repay creditors, given its current state with a depressed token value and limited assets to liquidate.
If the proposal gets approved by the court and the creditors, the reorganized company will issue a new token to creditors as part of a payout plan.
According to CelsiusFactNumbers, Celsius will use third-party services to be fully compliant with US regulations as a publicly traded company. The intended token will be used to repay the customer’s funds. He wrote:
“#CelsiusNetwork is looking at having a stratefied recovery smaller holders below 5k might get all assets to leave.
– Larger holders will get a debt token that seems to represent all the value, so you can sell if you don’t believe in the company or recovery.”
Holders of smaller amounts may be able to withdraw up to $7,500 worth of claims or 94% of the total. The new debt token issued will cover the remaining 5% and the amount larger than $7,500. CelsiusFactNumber wrote:
“- #CelsiusCustody users will be able to withdraw 7.5k up to 94% of their claims if the total is inferior to 7.5K
– Custody assets will be sent by the company, and fees seem that are going to be paid.
– #celsiusnetwork will send all the crypto back that was sent post petition.”
As Blockchain Journal reported, crypto lender Celsius Network filed for bankruptcy in July of 2022. At that time, the company said it would look to stabilize its business by restructuring in a way “that maximizes value for all stakeholders.”
