The U.S. Bankruptcy Court for the Northern District of California approved the reorganization of Celsius Network, a cryptocurrency lending platform, last week. The court order permits an exit from bankruptcy by transitioning to a bitcoin mining business model. As part of the reorganization, Celsius Network has sold its bitcoin mining hardware and software assets to Arrista Mining LLC. Furthermore, the court approved the sale of Celsius Network’s cryptocurrency-convertible note assets, estimated at $100 million, to Arrista Mining.
Celsius Network declared bankruptcy in February 2021 after facing numerous legal and law enforcement challenges since its launch in 2018. The company’s main service was providing customers with high-interest crypto-savings accounts, similar to a bank savings account. Celsius Network was also an early entrant in the crypto industry, offering blockchain-based loans.
In the order, the court stated that the reorganization plan would lead to an increase in the value of Celsius Network’s assets, and that the company’s creditors and shareholders “will be better served” by the reorganization. The order further noted that “a preponderance of the evidence supports the conclusion that the Plan is fair and equitable.”
Going forward, Celsius Network will shift to a bitcoin mining business model, enabling users to mine cryptocurrency from the comfort of their homes. The new mining platform will be powered by Arrista Mining’s hardware and software. Arrista Mining has acquired over 80 cryptocurrency mining rigs from Celsius Network, and the company has plans to acquire additional hardware in the near future.
