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New York's Southern District Bankruptcy Court, presided over by Judge Martin Glenn, recently gave the green light for beleaguered crypto lender Celsius to initiate balloting. This will allow its clientele to voice their opinions on an emerging settlement plan. The blueprint of this plan involves a group known as Fahrenheit acquiring Celsius' assets to establish a fresh enterprise.
This nascent entity will be tasked with distributing the assets previously held by Celsius. Additionally, it will share its equity with Celsius’ customer base.
Bloomberg shed light on the potential value of the asset distribution, estimating it at around $2 billion. To make the intricacies of the settlement transparent, Judge Glenn mandated Celsius to offer a clear and comprehensible breakdown of the arrangement. This must encompass aspects related to the volatile nature of cryptocurrencies and potential hiccups the company's mining operations might confront.
The pivotal component of this unfolding saga revolves around customer participation. If a client wishes to refrain from being a part of this settlement, they must actively choose to opt out. Chris Koenig, representing Celsius legally, provided insights, hinting that if all goes well, distribution might commence before this year wraps up. However, it's essential to note that the roadmap, even if backed by customers, would still necessitate a judicial nod. Predictions suggest this might materialize by October.
In a turn of events last May, Fahrenheit emerged victorious in a bid for Celsius' assets. An intriguing element of this deal was a commitment from US Bitcoin Corp., a Fahrenheit consortium member. They pledged to set the foundation for a formidable 100-megawatt cryptocurrency mining infrastructure.
But the timeline leading to this juncture wasn't devoid of turmoil. June 13, 2022, marked a significant downturn for Celsius as it suspended withdrawals. This action was a ripple effect due to the disintegration of the Terra ecosystem. The subsequent month witnessed Celsius declaring bankruptcy. The dramatic climax involved former top executive, Alex Mashinsky, facing arrest on charges of fraud. In a related development, both the U.S. Securities and Exchange Commission and the U.S. Federal Trade Commission took stringent measures against Celsius, with the latter imposing fines amounting to $4.7 billion.
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