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According to Reuters, a bankruptcy judge has allowed cryptocurrency lender Celsius Network’s switch to Bitcoin mining, stating that the company could diverge from a previously approved bankruptcy plan since creditors and clients would not be harmed by the new restructuring.
The change means that Celsius will cut ties with some of the outside bidders who were chosen to oversee the new company, leaving mining company US Bitcoin Corp. in charge of the new, creditor-owned mining business.
Celsius made the development known in a new tweet, stating that the court has approved the implementation of its “MiningCo transaction,” thus proceeding with its plan.
“MiningCo Transaction” envisions the development of a new publicly traded Bitcoin mining company, which will result in increased liquid cryptocurrency dividends to account holders following Celsius’s expected bankruptcy exit in early 2024.
Celsius claims that its customers will own equity in Mining NewCo, which will be managed by US Data Mining Group, Inc. It goes on to say that this is another key milestone in its Chapter 11 cases, as it maps a new course for the company.
After the SEC denied that plan, Celsius pulled back its broader intentions to generate fees from validating cryptocurrency transactions and launching new lines of business.
Celsius’s scaled-back bankruptcy plan frees up $225 million in cryptocurrency assets that would have been used to support the SEC-rejected new business lines.
Celsius filed for Chapter 11 bankruptcy protection in July 2022 and is expected to exit this state in early 2024.