Celsius Network is striving for a revival during Prime Trust's ongoing Chapter 11 bankruptcy saga.
In Brief
Prime Trust, along with its affiliates, has taken proactive steps by filing for Chapter 11 bankruptcy with the U.S. Bankruptcy Court in Delaware.
On August 14, a bankruptcy judge in the U.S. allowed Celsius Network, a cryptocurrency lender, to seek approval from creditors for its bankruptcy reorganization plan, moving closer to a fresh start under creditor oversight.
Prime Trust, along with its affiliates, has taken proactive steps by filing for Chapter 11 bankruptcy with the U.S. Bankruptcy Court in Delaware.
In recent months, Celsius has struggled to meet customer withdrawal requests. On August 15, Prime Trust disclosed it has between 25,000 and 50,000 creditors, with liabilities estimated between $100 and $500 million, compared to its assets estimated at $50 million to $100 million. press release Prime Trust announced that initiating the Chapter 11 bankruptcy proceedings will usher in a clear and transparent process aimed at maximizing value for its clients and stakeholders.
Sources indicate that Prime Trust intends to file various motions with the Bankruptcy Court to facilitate a thorough assessment of its strategic options, including plans to liquidate all assets and operations while ensuring that employees continue to receive wages and benefits.
Prime Trust offers financial infrastructure APIs tailored for digital asset and fintech organizations, streamlining the development of digital assets to help clients launch and scale effectively while adhering to compliance standards.
On August 14, a bankruptcy judge granted Celsius Network clearance to seek approval from its creditors for its proposed bankruptcy strategy, which includes restructuring to emerge as a creditor-controlled entity.
While there are mixed feelings among creditors regarding the proposal, the official committee representing junior creditors supports it and recommends that Celsius clients vote in favor.
Court filings indicate that creditors of Celsius must cast their votes on the company’s proposal by September 20, with aims to secure final court endorsement for its reorganization by October 2.
Celsius entered Chapter 11 protection back in July 2022, at which time it was reported to serve around 600,000 customers holding approximately $4.4 billion in interest-accumulating Celsius accounts.
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