Celsius Network, a prominent crypto lending platform that launched in 2017, has revealed its plan to shut down its app within 90 days as part of its ongoing bankruptcy proceedings. The decision marks a significant turning point for the company, which was once seen as a disruptor in the industry.
90-Day Shutdown Plan
According to the company’s revised disclosure statement, the Celsius app will cease operations within the next 90 days. This timeframe was chosen based on previous experiences in enabling crypto withdrawals from the app. Users will not be able to log in or access their Celsius accounts after the 90-day withdrawal window expires.
The shutdown is part of a broader restructuring plan that will see the company operate under a new entity named “NewCo.” This new entity will be managed by Fahrenheit Group and owned by Celsius’ creditors.
Repayment Plan for Creditors
Celsius has also outlined a comprehensive repayment plan for its creditors, which includes not only account holders but also those who earned rewards through Celsius’ partner programs.
The company has committed to distributing at least $2.03 billion of cryptocurrency to its creditors, subject to fluctuations in cryptocurrency prices. To facilitate this distribution, Paypal has been identified as a potential agent to handle distributions to individual creditors in the US. Additionally, Celsius is seeking a distribution agent for international creditors, corporate creditors, and Custody and Withhold creditors.
If the company fails to hire a distribution agent, the Celsius app will remain open for an additional 90 days after the effective date to pay these creditors through the app.
Transition to NewCo
As part of the restructuring, Celsius will transition to a new crypto company called “NewCo,” which will be managed by Fahrenheit Group and owned by customers. The new entity will be regulated by the SEC to ensure transparency.
Fahrenheit has plans to list NewCo’s stock on NASDAQ, aiming to maximize profits for the owners and provide access to the capital market in the future.
NewCo’s operations will primarily focus on mining and staking. US Data Mining Group, Inc. will handle mining operations, while Proof Group Capital Management will manage staking operations.
A New Chapter for Celsius
The announcement of the app’s shutdown and the formation of NewCo marks a significant shift for Celsius Network. While the closure of the app signals the end of an era, the creation of NewCo and the commitment to repay creditors indicate a determination to move forward.
The transition to mining and staking, along with the planned NASDAQ listing, suggests a strategic pivot that could redefine the company’s role in the crypto space.
As the 90-day window for withdrawals approaches, users and creditors will be watching closely to see how the company manages this complex transition and what the future holds for NewCo. The situation serves as a reminder of the volatility and risks inherent in the rapidly evolving cryptocurrency industry.
