Celsius crypto lending faces closure NewCo’s emergence amid an industry shift and a shutdown in 90 days due to bankruptcy proceedings
In a dramatic turn of events, the once-prominent crypto lending platform, Celsius, is teetering on the brink of closure after six years of making waves in the digital currency realm. Launched with a promise to revolutionize the industry in 2017, the company’s fortunes seem to be taking a swift downturn, leaving crypto enthusiasts and investors on the edge of their virtual seats.
While Celsius once exemplified innovation and potential, its narrative takes an unexpected turn. Recent events point to the impending 90-day cessation of the Celsius app, tied to ongoing bankruptcy procedures. A recent report indicates this transition, implying the end of its current phase. Crypto expert Simon Dixon promptly shared news of the app’s shutdown on Twitter.
In the cycle of closure, an opportunity emerges, a principle Celsius is committed to upholding. The struggling crypto enterprise prepares for a notable transformation, revealing intentions to reemerge as ‘NewCo.’ This fresh identity, guided by the Fahrenheit Group and influenced by the exchanges’ creditors, aims to mend what its precursor left behind.
Celsius’ Countdown to Closure
The impending closure, set to transpire within a mere three-month window, is slated to prevent users from accessing their accounts or utilizing the app. This sudden development stems from the company’s experience facilitating crypto withdrawals, as revealed in their revised disclosure statement tied to custody and withholding Settlements.
Amidst the impending dark cloud, a silver lining emerges for creditors. In a surprising twist, the company has outlined a comprehensive repayment plan. Remarkably, this reimbursement initiative extends beyond direct account holders with the exchange. Those who had earned rewards on their digital assets from other exchanges or Celsius’ partner programs are also slated for compensation.
Within the framework of the reimbursement strategy, Celsius is set to “promptly distribute at least $2.03 billion of cryptocurrency to their [its] creditors, subject to the fluctuations in cryptocurrency prices.” To ensure the seamless execution of this ambitious plan, the involvement of third-party distribution agents is paramount. Notably, payment behemoth PayPal is being considered to handle distribution to individual US-based creditors.
Underpinning the grand restructuring strategy, Celsius is giving birth to “NewCo,” a novel crypto endeavor set to be overseen by Fahrenheit Group and effectively owned by Celsius’ clientele. The Securities and Exchange Commission (SEC) is slated to regulate NewCo’s operations to infuse transparency into the company’s renewed journey.
Peering into NewCo’s roadmap, it’s evident that the company will pivot its focus toward mining and staking. Celsius has partnered with US Data Mining Group, Inc. to bolster its mining endeavors, a strategic move to ensure optimal operational efficiency. On the other hand, the reins of NewCo’s staking operations are set to be held by Proof Group Capital Management.