Crypto lender Celsius (CRYPTO: CEL) saw its CEL token trade 27% higher, taking its seven-day trading gain to 39%, on the heels of a dramatic bankruptcy case.
Market cap and trading volume in the past 24 hours increased 27% and 20%, respectively.
The momentum came as Chief Judge Martin Glenn of the U.S. Southern District of New York Bankruptcy Court confirmed a reorganization plan.
Celsius will return 67%-85% of holdings to creditors, CoinDesk reports.
Customers with funds tied up in Celsius will receive about 25 cents per CEL token.
Fahrenheit Holdings, a group that includes Arrington Capital and U.S. Bitcoin Corp, will oversee the proposed plan, which received majority support from creditors.
Former Celsius CEO Alex Mashinsky, who was arrested in July, was released on a $40 million bond while his banking and real estate assets were frozen.
His trial is scheduled for September 2024.
Delaware-based NewCo, the newly created company for reorganization, will focus on activities like mining and staking.
This marks a strategic business shift in focus for the restructured firm.
It will have a $1.25 billion balance sheet and it plans to stake some or all this Liquid Cryptocurrency to earn staking yields on the Ethereum network. This would lead to yield generation of $10 to $20 million annually.
The deal terms highlight individual custody account hZenger News to receive their assets in two distributions — the first tranche would be distributed upfront, and the second installment is set to be paid by the end of the year on plan resolution.
With the crypto industry space being impacted by scams, hacks, and bankruptcies, this will form a major part of the discussion at the upcoming Zenger News’s Future of Digital Assets conference, scheduled for Nov. 14. The conference is set to bring industry leaders and investors together, providing a fertile ground for discussions that reflect the current positive investment trends.
Celsius creditors are calculating a varying return in the form of Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), ranging from 67% for Earn Account hZenger News to 85.6% for participants in Celsius’ Earn Program. This is significantly better than the alternative option of asset liquidation, with a recovery of around 47%.
Produced in association with Benzinga
