The crypto industry witnessed a significant turnaround with the successful restructuring of Celsius Network, a leading crypto lender. Our firm played a pivotal role in navigating the bankruptcy proceedings and crafting a plan that ensured the return of cryptocurrency to customers and the creation of a new company.

The Crisis: Celsius Network, once valued at $3 billion, faced a major setback in July 2022 when it filed for Chapter 11 protection. This came after the company froze customer accounts to prevent withdrawals, leading to one of the largest crypto collapses of the year.

Our Involvement: We were integral in formulating and implementing a restructuring plan that received approval from U.S. Bankruptcy Judge Martin Glenn in Manhattan.

Key Aspects of the Restructuring:

New Management:
○ The reorganised Celsius Network will be managed by Fahrenheit LLC, a consortium that includes hedge fund Arrington Capital.
○ The new entity will focus on bitcoin mining and earning staking fees through blockchain transaction validation.

Financial Strategy:
○ Fahrenheit LLC will invest $50 million for a minority stake in the new company.
○ The new company's stock will be publicly listed on Nasdaq, allowing Celsius customers to sell the equity shares they receive as part of their bankruptcy recovery.
○ Approximately $2 billion in cryptocurrency will be returned to account holders.

Customer Impact: Celsius had 600,000 customers with $4.4 billion in interest-bearing accounts at the time of filing. The restructuring plan ensures a partial repayment of their cryptocurrency assets and equity shares in the new company.

Regulatory and Legal Actions: The restructuring also includes litigation against Celsius founder Alex Mashinsky, who faces criminal charges and a civil lawsuit for allegedly misleading customers and inflating the value of Celsius's proprietary token, CEL.

Outcome: Michael Arrington, founder of Arrington Capital, emphasised the significance of this restructuring, stating that it stands apart from other crypto collapses due to its successful reorganisation. This outcome not only revitalises Celsius Network but also provides a clear path for customers to recover their assets.

Conclusion: Our firm’s expertise in handling complex bankruptcy and restructuring processes was crucial in navigating Celsius Network through its financial turmoil. This case underscores our ability to deliver innovative solutions and achieve positive outcomes in the rapidly evolving crypto industry.