Celsius Eyes Transition to Bitcoin Mining Only Following SEC Comments

Defunct crypto lender Celsius Network is planning to limit its business to focus on bitcoin mining only following the Securities and Exchange Commission’s (SEC) feedback on its approved Chapter 11 reorganization plan.

On November 9, Celsius received approval from the bankruptcy court for its Chapter 11 reorganization plan. The plan outlined a restructuring of its illiquid assets into a new entity temporarily named “Fahrenheit NewCo.” This entity would be managed by Fahrenheit LLC, acting on behalf of Celsius creditors.

The objective is to sustain cash flows through Fahrenheit NewCo via mining and staking activities. However, Celsius noted that after the court’s approval, it received feedback from the SEC. In light of this feedback, certain assets initially earmarked for transfer to Fahrenheit NewCo will now be retained by the Celsius estates.

Consequently, Celsius intends to initiate the process of registering shares for a new publicly traded bitcoin mining company. Tentatively named “Mining NewCo,” it will continue to be owned by Celsius customers.

Essentially, the scope of the previous Fahrenheit NewCo will now be confined to bitcoin mining. Celsius mentioned ongoing negotiations with relevant parties regarding the future management of Mining NewCo.

In May, Celsius selected Fahrenheit LLC as the winning bidder to manage the new entity on behalf of Celsius customers. Fahrenheit LLC comprises a consortium of companies and individuals, including US Bitcoin Corp (USBTC), Arrington Capital, Proof Group, Steven Kokinos, and Ravi Kaza. USBTC is close to completing the merger transaction with Hut 8 (NASDAQ: HUT). The managed service fees form a notable part of USBTC’s quarterly revenues.

Because of the anticipated change, Celsius said the management fees to be paid to the Mining NewCo operators will be lowered than that to the Fahrenheit NewCo. Subsequently, the distribution of liquid assets to Celsius customers will also be larger.

Celsius added that it will file modifications to the approved reorganization plan in the coming weeks but does not anticipate delays in commencing the distribution of liquid assets to customers, slated to begin in January.