Celsius Network's Bankruptcy Exit Plan with NovaWulf

Celsius Network's Bankruptcy Plan

Celsius Network, a prominent crypto lender, is set to exit bankruptcy through a strategic partnership with NovaWulf Digital Management. This plan, presented in a Manhattan court, aims to return crypto assets to Celsius customers by June. NovaWulf was selected from over 130 proposals, as it committed to long-term management of Celsius' less liquid assets, such as its loan portfolio and bitcoin mining operations.

Returning Assets to Customers

The partnership with NovaWulf allows Celsius to exit Chapter 11 bankruptcy. Customers with account balances under $5,000 can expect a one-time payment in bitcoin, Ethereum, or USDC stablecoin. This option will be available to over 85% of Celsius users, providing approximately 70% of their deposit value.

Ownership and Profit Sharing

For customers with larger balances, remaining crypto assets will be distributed after smaller accounts are settled. Additionally, these customers will receive ownership shares in the reorganized company, termed "NewCo." NovaWulf will invest up to $55 million into NewCo, which will continue Celsius' bitcoin mining and loan operations. Profits will be shared between NovaWulf and Celsius creditors.

Legal Proceedings and Accountability

NewCo will also pursue legal actions related to the collapse of Celsius, including claims against former CEO Alex Mashinsky and other insiders. These claims involve allegations of withdrawing substantial funds during the company's downfall and causing significant financial losses. New York's attorney general has filed a lawsuit against Mashinsky for alleged fraud.

Benefiting Celsius Customers

Any financial gains from post-bankruptcy litigation will benefit customers who hold ownership stakes in NewCo. Celsius initially filed for U.S. bankruptcy in July, citing over 1.7 million registered users and about 300,000 active users with significant account balances. This restructuring plan aims to restore value to its extensive customer base.