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Celsius creditors vote in favor of restructuring plan

Sep 26, 2023
Illustration of the Celsius logo frozen, with icicles.

Illustration: Shoshana Gordon/Axios

Creditors in the Celsius bankruptcy case voted overwhelmingly in favor of its proposed restructuring plan, according to a voting declaration filed by restructuring agency Stretto.

Why it matters: The vote brings the firm closer to exiting the bankruptcy process and moves creditors closer to recovering most of their assets.

Driving the news: Most classes in the bankruptcy claim voted more than 98% in favor of the reorganization plan, which is expected to return between 67% and 85% of their holdings.

The intrigue: Creditors approved the plan despite objections from the U.S. Trustee, the DOJ-backed entity overseeing bankruptcy cases.

  • The SEC has also filed a limited objection to the plan, questioning Coinbase's proposed involvement in distributing assets to Celsius' international customers.

Details: Under the plan, Celsius' assets would be sold to a consortium called Fahrenheit Holdings, which includes Arrington Capital and bitcoin miner U.S. Bitcoin Corp.

  • The consortium would distribute about $2 billion worth of bitcoin and ethereum back to creditors.
  • In addition to a return of their assets, creditors will get equity in a newly formed entity, temporarily referred to as NewCo.
  • NewCo is expected to take charge of and expand the debtors' bitcoin mining operations, engage in ethereum staking, and monetize some of the debtors' less liquid assets, according to a disclosure statement filed Aug. 17.

What's next: The plan still requires approval from the bankruptcy court, with a hearing scheduled for Oct. 2.

Catch up fast: Celsius filed for bankruptcy over a year ago, on July 13, 2022.

  • The Fahrenheit consortium won a bid to acquire the Celsius assets in May.
  • In July, former CEO Alex Mashinsky was indicted and charged with fraud related to the firm's collapse.
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