Celsius unveiled a restructuring plan with options to recoup funds

Roughly a month after customer withdrawals were halted, cryptocurrency lending platform Celsius Network filed for bankruptcy in the United States. Now, in a bankruptcy court hearing on Monday, it shared its financial overview and restructuring plan with Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York.

$1.2 billion hole and restructuring plan

Restructuring plans disclose steps including, for example: restructuring negotiations; financing BTC mining operations and selling assets. In addition, the company will offer customers the option to withdraw funds at a discount or to keep them invested in their cryptocurrency holdings.

The documents state that the bankruptcy filing was a way for the company to protect itself and develop a restructuring plan. Celsius' liabilities exceed its assets by nearly $1.2 billion. In other words, this is the size of the "hole" in the company's balance sheet.

Among the documents submitted to the court was a 61-page statement from Celsius CEO Alex Mashinsky detailing the compensation strategy. In the document, the company said it plans to negotiate comprehensive restructuring transactions with the parties involved. Its goal is to preserve the value of the enterprise.

The company further stated that it will continue to run its BTC mining operations and use the generated BTC to help the company pay off its creditors. Although the mining entity Celsius Network has also filed for bankruptcy, it is still operational. Of the nearly 80,000 ASIC miners owned by the company, about 43,000 are still in operation.

Celsius plans to open more mining facilities ahead of another reorganization to better repay creditors. The company also said it would consider "asset sales and third-party investment opportunities" to meet financial obligations.

A plan to allow customers to recover their funds will also be announced soon. One option is to offer a discounted cash settlement. The second option is for the user to keep investments in the company until the restructuring is completed. The plan may also include the distribution of CEL tokens. The goal is to maximize returns for investors and reorganize the business.

Celsius' digital asset holdings shrank from $14.6 billion at the end of March to $1.7 billion as of July 14. For perspective, the company currently owes customers three times the value of its digital assets.

The proceedings will not be liquidation, but will try to return the money to the affected customers as much as possible.

"All is not lost. We intend for this to be a reorganization. Our goal is to maximize the value of the Celsius Network assets for the benefit of our customers.”

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