The New York judge overseeing Celsius Network LLC’s bankruptcy urged the US Securities and Exchange Commission to move quickly in deciding if it will authorize the failed crypto lender’s plan to transform itself through Chapter 11 into a publicly-traded Bitcoin mining firm.
Judge Martin Glenn told an SEC lawyer during a Monday court hearing he hopes the regulator will go through its own decision-making process expeditiously because Celsius and its creditors have moved through Chapter 11 relatively quickly.
“The SEC will make whatever decision it believes is the correct one,” Glenn said. “I just hope the process will move forward, so if there are any bumps in the road we can try and work those out along the way.”
Glenn is considering whether to approve Celsius’s plan to partially repay customers whose accounts have been frozen since June 2022, weeks before the company filed bankruptcy. Celsius’s bankruptcy plan proposes repaying customers through a combination of crypto currency and stock in a new publicly traded Bitcoin mining company guided by a new management team led by Arrington Capital.
Celsius and creditors would still need clearance from the SEC if its proposal to transform the company into a new business is approved by Glenn, according to court documents. The crypto firm could liquidate if its plan to exit Chapter 11 as a crypto miner fails.
Celsius’s repayment proposal, though widely supported by creditors, is being challenged by some of its customers. Customers who spoke Monday against the restructuring plan said they’d prefer liquidation because they’d receive more Bitcoin and Ethereum as opposed to stock in a new, unproven venture.
Other customers complained about fees paid to the crypto lender’s bankruptcy advisers, the process used to solicit creditor votes in support of its repayment plan and a key settlement over the value of Celsius’s native CEL token.
Glenn said he’ll issue a ruling on Celsius’s proposal as soon as possible.
The bankruptcy is Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York (Manhattan).