Lawyers for the defunct cryptocurrency lender Celsius Network said on January 24 that the company intends to leave the bankruptcy process by rebranding itself as a new, publicly listed recovery entity. The company stated that this transition might take several months.
A lawyer representing Celsius, Ross M. Kwasteniet, also informed the court that discussions are underway with the company’s creditors on how to relaunch the platform while still appropriately compensating them.
The attorneys also emphasized that Earn clients will be treated the same as everyone else in the final recovery of assets, notwithstanding the recent judgment by U.S. Bankruptcy Judge Martin Glenn that assets in Celsius’ Earn program are the property of the exchange’s estate and not consumer property.
In Kwasteniet’s words:
“Celsius depositors all have something in common – they all deposited crypto, and they all have a claim for the return of the crypto and we’re focused on doing a plan that treats them equally … the Earn customers, we think, are going to be treated equally.
And they’re going to be entitled to a significant return of value here. The fact that Earn is property of the estate doesn’t mean that we can go out and have a party with it. It goes back to the customers.”
In July 2022, Celsius declared bankruptcy. According to court documents, the platform had around $4.3 billion in assets and $5.5 billion in liabilities.
CEO Alex Mashinsky explained the road to bankruptcy, saying that the number of digital assets on the business’s platform expanded faster than the company was prepared to deploy. He continued by saying that this led them to make some bad choices about how to allocate its resources.