Projected Lower Management Fees and Increased Liquid Cryptocurrency Distributions for Creditor Payouts Beginning in January 2024

Summary

Celsius Network LLC, a global cryptocurrency platform, has received confirmation from the United States Bankruptcy Court for the Southern District of New York for its chapter 11 plan. However, the Securities and Exchange Commission (SEC) has provided feedback on the plan, causing Celsius to revise its transaction focus to Bitcoin mining. Celsius intends to apply to register the shares of a new publicly traded Bitcoin mining company, called Mining NewCo, which will be owned by Celsius customers. Some assets that were meant to be transferred to another company, Fahrenheit NewCo, will now be retained by Celsius for regulatory reasons. The Debtors expect lower management fees and increased liquid cryptocurrency distributions for creditors as a result.

Introduction

Celsius Network LLC has received confirmation from the Bankruptcy Court for its chapter 11 plan. However, the SEC’s feedback has led to a revision of the transaction focus to Bitcoin mining. Celsius intends to register the shares in a new publicly traded Bitcoin mining company, Mining NewCo, which will be owned by Celsius customers. Some assets initially meant to be transferred to Fahrenheit NewCo will now be retained and monetized by the Plan Administrator and/or Litigation Administrator to benefit creditors.

Main Points

• Following confirmation of the chapter 11 plan, Celsius intends to apply to register the shares of Mining NewCo, a Bitcoin mining company to be owned by Celsius customers.
• Assets originally planned to be transferred to Fahrenheit NewCo will now be retained by Celsius for regulatory reasons.
• Celsius is in discussions with parties regarding the management of Mining NewCo, and lower management fees and increased liquid cryptocurrency distributions are expected.
• The Debtors will file a motion with the Bankruptcy Court to approve modifications to the Plan reflecting the new Mining NewCo transaction.
• The Debtors anticipate that distributions to creditors will begin in January 2024.

Conclusion

Celsius Network LLC has received confirmation of its chapter 11 plan, but the SEC’s feedback has prompted a shift towards Bitcoin mining. Celsius intends to register the shares of Mining NewCo, a Bitcoin mining company owned by Celsius customers. Some assets initially planned to be transferred to Fahrenheit NewCo will now be retained and monetized for the benefit of creditors. The Debtors expect lower management fees and increased liquid cryptocurrency distributions for creditors. Modifications to the Plan reflecting the new transaction will be filed with the Bankruptcy Court, and distributions to creditors are anticipated to commence in January 2024.