Crypto lending platform Celsius Network has made changes to its plans after emerging from bankruptcy, focusing solely on Bitcoin.
Crypto lending platform Celsius Network has made changes to its plans after emerging from bankruptcy, focusing solely on Bitcoin mining due to regulatory concerns expressed by U.S. authorities about its other proposed business activities.
Celsius had initially intended to generate income through "staking" fees, which involved validating blockchain transactions and managing cryptocurrency loans, as part of its restructuring strategy. However, the company announced on Monday that it had adjusted its direction based on feedback received from the U.S. Securities and Exchange Commission (SEC).
The revised plan, approved by a U.S. bankruptcy court in Manhattan on November 9, allowed Celsius to return cryptocurrency to its customers and establish a new company owned by Celsius creditors. However, the SEC did not explicitly state during the bankruptcy proceedings whether the new company's business plans would violate U.S. regulations.
This strategic shift has led to further negotiations with Fahrenheit, a consortium of bidders chosen to oversee the reorganized company. Celsius plans to seek court approval for a modified bankruptcy plan in the near future.
Celsius anticipates that the reduced scope of the new company will lead to reduced management fees and enable a larger amount of cryptocurrency to be directly returned to customers starting in January 2024.
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