Celsius to Transition to Mining-Only NewCo After SEC Feedback in Updated Bankruptcy Plan

Crypto lender Celsius will transition to a new company that focuses only on mining bitcoin, a shift from an earlier reorganization plan that included a focus on staking too, it announced in a court filing late Monday.

The move comes after the U.S. Securities and Exchange Commission (SEC) gave feedback “on certain aspects of the Plan.” On Monday, a few hours before the Celsius announcement, CoinDesk reported that the court-approved reorganization plan had hit a speed bump because the SEC wanted more information about the assets of the former crypto lender.

A Judge earlier handed the implementation of Celsius’s reorganization to Fahrenheit Holdings, a group that includes Arrington Capital and crypto miner U.S. Bitcoin Corp. Fahrenheit won a bid to acquire Celsius in May 2023. The plan was to see the creation of a new company registered in Delaware, currently referred to in filings as NewCo, usually a term used to describe a corporate spinoff before it is assigned a final name. The company was to focus on mining and staking, according to the court-approved plan.

“In the coming weeks, the Debtors intend to file a motion with the Bankruptcy Court to approve modifications to the Plan to reflect the new Mining NewCo transaction,” the filing said. “The Debtors do not believe that these modifications will require resolicitation of the Plan. The Debtors still anticipate that distributions to creditors will commence in January of 2024.”

The SEC’s feedback resulted in “Celsius now intending to begin the process to apply to register the shares in a new publicly traded Bitcoin mining company that will be owned by Celsius customers (the “Mining NewCo”).” Bitcoin Mining was the core business of the proposed new company, but the SEC’s “feedback” appears to have led stakeholders to determine that “certain” assets that were to be transferred to Fahrenheit Holdings will now, “for regulatory reasons, be retained by Celsius’s estates to be administered and monetized by the Plan Administrator and/or Litigation Administrator for the benefit of creditors.”