Less than 24 hours after revealing a three-month cash flow forecast that threatens total money depletion, a New York judge allowed cryptocurrency lender Celsius Network to mine and sell Bitcoin (BTC) during its bankruptcy.
Since July 2022, Celsius Networks has been in the crosshairs of United States officials after reports of bankruptcies surfaced, putting many crypto investors at risk of losing their savings.
Last week many were very angry with me, as I said @CelsiusNetwork money would run out and solutions had to be implemented more quickly. I was told I don’t understand chapter 11. They have now confirmed that they will run out of money in October. https://t.co/CyzjgKpId7 pic.twitter.com/vBIRIGEmG2
— Simon Dixon (Beware of impersonators) (@SimonDixonTwitt) August 15, 2022
On the second day of the hearing, New York Southern District Chief of Bankruptcy Judge Martin Glenn approved Celsuis’ request to run BTC mining and selling operations as a means of restoring financial stability.
However, Glenn expressed concern about the immediate profitability of BTC mining as he rightly pointed to the high initial investment required for setting up mining infrastructure.
Today, together with the Unsecured Creditors Committee (UCC), which consists mainly of customers, the US Trustee and a number of other key parties, we participated in the Second Day Hearing, where we continued the dialogue on Celsius’s efforts to value to our community.
— Celsius (@CelsiusNetwork) August 17, 2022
However, the recent approval is only limited to mining and selling the mined BTC. The court banned Celsius from selling equity or debt investments in other crypto companies and required the cryptocurrency lender to disclose information about the assets in advance.
The decision to allow a defaulting crypto company to start crypto mining operations stems from investor concerns about the unfair results submitted by more than 250 clients – as shown above.
Despite fears that the money will run out in October, the company’s lawyer reaffirmed that investing in mining will bring returns to Celsius. The US Department of Justice and the Texas State Securities Board, which previously opposed Celsius’ intention to delve into BTC mining, also withdrew their objection after Celsius clarified that it would only sell the mined Bitcoin for cash. .
Celsius also revealed at the hearing that BTC prices have risen by 25% since the company filed the petition. The final hearing will take place on September 1, finalizing the plan before Celsius leaves and the funds are distributed.
Related: German Crypto Bank Nuri With Files Of 500K Users Due To Insolvency
Singapore-based crypto lending platform Hodlnaut suspended withdrawals and deposits on Aug. 8, citing poor market conditions and lack of liquidity.
Dear users, we regret to inform you that we will immediately stop withdrawals, token swaps and deposits due to the recent market conditions. We have also withdrawn our MAS permit application. Here’s our full statement https://t.co/5KfHUBzWsn Our next update is on Aug 19th.
— Hodlnaut (@hodlnautdotcom) August 8, 2022
Shortly after revealing the suspension of services, including token swaps, Hodlnaut announced that he was working on recovery plans, adding:
“We are consulting with Damodara Ong LLC on the feasibility and timelines of our envisaged execution plan and are developing a strategy for our recovery plan with the best interests of our users in mind.”
After the service was shut down, Hodlnaut suspended all of his social media accounts except Twitter and Telegram.