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☆ Celsius Network faces roadblocks in pivot to bitcoin mining
▼ + stars: | 2023-11-30 | by ( Dietrich Knauth | ) www.reuters.com time to read: +3 min

REUTERS/Dado Ruvic/Illustration//File Photo Acquire Licensing RightsNEW YORK, Nov 30 (Reuters) - Crypto lender Celsius Network may have to seek a new creditor vote on its proposed transformation into a bitcoin mining business, a U.S. bankruptcy judge said during a court hearing on Thursday. Celsius said last week that it had reduced its post-bankruptcy business plans to focus only on bitcoin mining, citing the skepticism of the U.S. Securities and Exchange Commission (SEC) about its other planned business lines. The SEC did not definitively object to Celsius' bankruptcy plan before it was approved, but Celsius said the agency was unwilling to approve crypto lending and staking activity that the agency has opposed in the past. Celsius attorney Chris Koenig argued at Thursday's hearing that Celsius's court-approved bankruptcy plan gave the company flexibility to pivot to a mining-only business. Celsius creditors can expect a 67% recovery under the new plan, an increase from 61.2% under the Fahrenheit deal, according to court documents filed on Thursday.

Persons: Dado Ruvic, Martin Glenn of, Glenn, Chris Koenig, Koenig, Arrington, BRIC, Dietrich Knauth, Alexia Garamfalvi, Grant McCool Organizations: REUTERS, U.S . Securities, Exchange Commission, SEC, Bankruptcy, US Bitcoin Corp, Arrington Capital, Recovery Investment, US, Thomson Locations: U.S, Martin Glenn of New York

☆ Crypto lender Celsius Network cleared to exit bankruptcy
▼ + stars: | 2023-11-09 | by ( Dietrich Knauth | ) www.reuters.com time to read: +3 min

REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing RightsNEW YORK, Nov 9 (Reuters) - Crypto lender Celsius Network received U.S. bankruptcy court approval for a restructuring plan that will return cryptocurrency to customers and create a new company owned by Celsius creditors. Crypto lenders BlockFi and Voyager Digital were wiped out in bankruptcy, and cryptocurrency exchange FTX remains stuck in Chapter 11 proceedings. In addition to their stake in the new company, Celsius customers will receive a partial repayment of the cryptocurrency assets they deposited on the platform. Celsius had 600,000 customers who held about $4.4 billion in interest-bearing Celsius accounts when it filed for bankruptcy, according to court documents. The restructuring plan includes a settlement that values Celsius's proprietary crypto token, CEL, at 25 cents.

Persons: Dado Ruvic, Martin Glenn, Michael Arrington, BlockFi, Arrington, Alex Mashinsky, Mashinsky, Dietrich Knauth, Alexia Garamfalvi, Lisa Shumaker, Bill Berkrot Organizations: REUTERS, Bankruptcy, LLC, Arrington Capital, Voyager, Nasdaq, Thomson Locations: Manhattan, New Jersey, New York

Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS/Dado Ruvic/Illustration/file photoCompanies Celsius Network Limited FollowNEW YORK, Aug 14 (Reuters) - Crypto lender Celsius Network on Monday received a U.S. bankruptcy judge's permission to seek creditor approval for its bankruptcy plan, advancing a proposal to exit Chapter 11 as a new entity owned by its creditors. Some creditors oppose the plan, but the official committee appointed to represent junior creditors supports it and will recommend that Celsius customers vote in favor. Celsius had 600,000 customers who held about $4.4 billion in interest-bearing Celsius accounts when it filed for bankruptcy, according to court documents. This will allow Celsius customers to sell equity shares that they will receive as part of their bankruptcy recovery, according to court documents.

Persons: Dado Ruvic, Martin Glenn, Alex Mashinsky, Mashinsky, Dietrich Knauth, Alexia Garamfalvi, David Gregorio Our Organizations: REUTERS, Monday, Arrington, Nasdaq, Thomson Locations: Manhattan, . New Jersey, New York

NEW YORK, June 29 (Reuters) - A U.S. bankruptcy judge said Thursday that he would allow SVB Financial Group to sell its investment banking division, once the company has ensured that it is not releasing any liabilities related to the collapse of its Silicon Valley Bank unit. James Bromley, an attorney for SVB Financial, told Glenn that it would remove the liability releases from the deal by Friday. SVB Financial owned Silicon Valley Bank before it was seized by the U.S. Federal Deposit Insurance Corporation (FDIC) in March, and it is attempting to sell its remaining assets in bankruptcy. Glenn also criticized the FDIC during the court hearing, saying he would not allow the agency to block SVB Financial from getting information about its seizure of about $2 billion from SVB Financial' s bank accounts. Silicon Valley Bank's failure in March triggered the worst U.S. banking crisis in 15 years.

Persons: Martin Glenn, Jeff Leerink, Glenn, James Bromley, SVB, you'd, I'm, Erik Bond, Dietrich Knauth, Alexia Garamfalvi, Diane Craft Organizations: YORK, SVB, Bank, Bankruptcy, SVB Securities, Baupost, Silicon Valley Bank, U.S . Federal Deposit Insurance Corporation, FDIC, Citizens, Thomson Locations: Manhattan, Silicon, U.S, backstop

☆ SVB Financial defeats FDIC effort to seize incoming tax refunds
▼ + stars: | 2023-05-17 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

Judge Martin Glenn in Manhattan handed a victory to SVB Financial in broader dispute over FDIC's efforts to recoup its costs in rescuing the failed Silicon Valley Bank, preventing the regulator from claiming future tax refunds that SVB Financial valued at $300 million. FDIC sought to escrow those funds while the regulator determines whether they properly belong to the seized bank or the bankrupt parent company. Glenn ruled that FDIC had no authority to intercept checks that were clearly written out to "SVB Financial." He ordered FDIC to return the intercepted checks by Friday, and to send any future tax refunds checks to SVB Financial. FDIC argued that the tax refunds may be owed to the seized bank, which is now run by First Citizens BancShares, under a tax agreement between the bank and its former parent company.

☆ SVB's former parent may need new funding after $2bln cash seizure
▼ + stars: | 2023-04-26 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

The FDIC has also not fully explained why the cash was seized, Bromley said. FDIC's attorney, Derek Baker, told Glenn that SVB Financial's bank accounts were properly seized as part of FDIC's takeover of the failed bank. The cash is being held as a set-off against the regulator's costs in stepping in to protect SVB customer deposits, and FDIC is working to provide more detail about its claims against SVB Financial, Baker said. Glenn said he needed more information about the FDIC's authority to seize cash and how disputes related to the seizure should be resolved. SVB Financial is also still waiting for the full return of financial records that were seized as part of the bank takeover.

☆ SVB's former parent may need new funding after $2 billion cash seizure
▼ + stars: | 2023-04-26 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

April 26 (Reuters) - Silicon Valley Bank's former owner may need to take out a bankruptcy loan amid uncertainty about the U.S. Federal Deposit Insurance Company's seizure of $2 billion in cash from the company, its attorney said Wednesday. The FDIC has also not fully explained why the cash was seized, Bromley said. FDIC's attorney, Derek Baker, told Glenn that SVB Financial's bank accounts were properly seized as part of FDIC's takeover of the failed bank. Glenn said he needed more information about the FDIC's authority to seize cash and how disputes related to the seizure should be resolved. SVB Financial is also still waiting for the full return of financial records that were seized as part of the bank takeover.

California banking regulators on March 10 closed Silicon Valley Bank in the largest U.S. bank failure since the 2008 financial crisis. Kurt Gwynne, an attorney for the FDIC as receiver for Silicon Valley Bank, disputed at Tuesday's hearing that regulators had done anything improper. Destroyed SVB (Silicon Valley Bank) logo is seen in this illustration taken March 13, 2023. Glenn said he was prepared to allow SVB Financial to use up to $100 million for investment activity. Silicon Valley Bank was SVB Financial's largest asset, accounting for more than $15.5 billion of SVB Financial's $19.7 billion in total assets.

☆ Celsius Network remains open to other bids after NovaWulf offer
▼ + stars: | 2023-03-08 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

March 8 (Reuters) - Bankrupt crypto lender Celsius Network on Wednesday revealed that it was speaking to another potential buyer and will seek additional bids, despite having an offer in hand from asset manager NovaWulf Digital Management. Glenn agreed to give Celsius an extra three weeks to file a Chapter 11 plan. With NovaWulf's offer in hand, Celsius should be able to exit from bankruptcy by June, less than a year after it filed for Chapter 11, Koenig said. If Celsius chooses an alternate bidder, Koenig said, it intends to offer NovaWulf up to $20 million in breakup fees. "If there is a higher offer, it will be because of the floor set by NovaWulf," Koenig said.

☆ Celsius Network chooses NovaWulf bid for bankruptcy exit
▼ + stars: | 2023-02-15 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

Feb 15 (Reuters) - Crypto lender Celsius Network will seek to exit bankruptcy under the guidance of asset manager NovaWulf Digital Management, which will take over the operations of a new company that will be owned by Celsius customers, the company said at a court hearing in Manhattan on Wednesday. Celsius selected NovaWulf's bid out of more than 130 proposals received during its bankruptcy case, saying that NovaWulf was the only finalist that intended to maintain long-term control over Celsius' harder-to-liquidate assets, like its loan portfolio and bitcoin mining business. Those assets would be owned by Celsius creditors and managed by NovaWulf under a profit-sharing agreement if Celsius' proposal is approved by U.S. Bankruptcy Judge Martin Glenn, who is overseeing Celsius' Chapter 11 process. NovaWulf has agreed to pay up to $55 million to the reorganized company, which will be owned by Celsius creditors and will continue Celsius' bitcoin mining and loan businesses. Several creditor groups had opposed Celsius' request for more time to file a bankruptcy plan, but Celsius said that the court-appointed committee representing its customers approved the NovaWulf deal.

New Jersey-based Celsius filed for U.S. bankruptcy in July last year, after freezing customer withdrawals from its platform. She was tasked with investigating accusations by Celsius customers that the company operated as a Ponzi scheme and also with reporting on its handling of cryptocurrency deposits. Celsius gathered crypto deposits from retail customers and invested them in the equivalent of the wholesale crypto market. It raised some of the initial capital to fund its business by creating and selling its own crypto token, called "CEL". "The business model Celsius advertised and sold to its customers was not the business that Celsius actually operated," the report said.

☆ Celsius' business model different from that advertised -U.S. bankruptcy examiner
▼ + stars: | 2023-01-31 | by ( ) www.reuters.com time to read: +1 min

SINGAPORE, Jan 31 (Reuters) - The business model that crypto firm Celsius Network had advertised and sold to its customers was not the business it actually operated, a court-ordered examiner report released on Tuesday showed. The report added that Celsius's stablecoin deficit between May 28, 2021 and its bankruptcy filing amounted to a billion-dollar hole in its assets. Hoboken, New Jersey-based Celsius filed for Chapter 11 protection from creditors last July in Manhattan after freezing customer withdrawals from its platform. U.S. Bankruptcy Judge Martin Glenn, who is overseeing the Chapter 11 case, appointed former prosecutor Shoba Pillay as an independent examiner in September. She was tasked with investigating accusations by Celsius customers that the company operated as a Ponzi scheme and also with reporting on its handling of cryptocurrency deposits.

☆ Ponzi probe finds bankrupt crypto lender Celsius wasn't doing business the way it told customers
▼ + stars: | 2023-01-31 | by ( Ryan Hogg | ) www.businessinsider.com time to read: +3 min

Celsius misled customers when it advertised its business model, a court-appointed examiner said. The crypto lender filed for bankruptcy in June as the market collapsed. Examiner Shoba Pillay said the lender was making the market for its CEL coin by buying it. Pillay said Celsius spent $558 million buying its own Celsius token on the market in a bid to prop up its flagging assets. "In effect, Celsius bought every CEL token in the market at least one time and in some instances, twice," Pillay wrote.

☆ Celsius bankruptcy examiner expected to report on Ponzi allegations
▼ + stars: | 2023-01-30 | by ( Dietrich Knauth | ) www.reuters.com time to read: +3 min

Jan 30 (Reuters) - A court-ordered examiner is expected to release a report on Monday addressing whether bankrupt crypto firm Celsius Network operated as a Ponzi scheme, which could add to the pressure on founder Alex Mashinsky, who is already facing fraud allegations. Hoboken, New Jersey-based Celsius filed for Chapter 11 protection from creditors last July in Manhattan after freezing customer withdrawals from its platform. After appointing Pillay to the job, Glenn expanded her role by asking her to address persistent customer complaints about Mashinsky's conduct. Crypto exchange FTX, which went bankrupt in November, has resisted calls for an examiner in its own Chapter 11 case, citing the cost of overlapping investigations. Pillay and her team have sought to be paid $1.86 million for work performed in October and $1.69 million for November, according to court filings.

☆ Celsius is weighing a crypto bankruptcy token to pay back creditors in reorganization
▼ + stars: | 2023-01-25 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

Celsius is considering issuing a crypto token to repay creditors, the company said in a bankruptcy court hearing. Lawyers for the firm say reorganizing would yield more money for creditors as opposed to liquidating assets. But Celsius may be the first to issue a token to buy its way out of bankruptcy. Before filing for bankruptcy, Celsius managed $11 billion worth of assets and had around 1.7 million users. That cleared the way for Celsius to sell $18 million in stablecoin to pay its bills to stay longer in Chapter 11 bankruptcy.

☆ U.S. judge says Celsius Network owns most customer crypto deposits
▼ + stars: | 2023-01-05 | by ( Dietrich Knauth | ) www.reuters.com time to read: +3 min

Jan 4 (Reuters) - A U.S. bankruptcy judge ruled on Wednesday that Celsius Network owns most of the cryptocurrency that customers deposited into its online platform, meaning most Celsius customers will be last in line for repayment in the crypto lender's bankruptcy. The ruling means that most Celsius customers will be lower priority than customers who held non-interest bearing accounts and other secured creditors. Celsius' terms of service made clear that the crypto lender took ownership of customer deposits into its interest-bearing Earn accounts, according to Glenn. That means that Earn customers will be treated as unsecured creditors in Celsius' bankruptcy, and they will be last in line for repayment after Celsius repays higher-priority debts. The ruling authorizes Celsius to sell approximately $18 million stablecoins that had been held in customers' Earn accounts.

Dec 7 (Reuters) - A U.S. bankruptcy judge on Wednesday ruled that some customers of crypto lender Celsius Network should receive their deposits back, giving relief to a relatively small group of customers whose deposits were never commingled with other Celsius funds. U.S. Bankruptcy Judge Martin Glenn is weighing broader questions of who owns crypto assets that were deposited with Celsius. Judge Glenn has not yet ruled on ownership of Celsius "earn" accounts or "withhold" accounts. Those regulatory investigations, which alleged that earn accounts were an unregistered securities offering, caused Celsius to create non-interest bearing custody accounts and withhold accounts. When it filed for Chapter 11 bankruptcy in July, Celsius reported $4.3 billion in assets and $5.5 billion in liabilities, primarily owed to its customers.

If Celsius deposits are determined to belong to customers, users are far more likely to get their assets returned. Crypto companies typically offer a variety of accounts and they will likely be treated differently in bankruptcy. BlockFi, which is at the beginning of its own bankruptcy case, also offers both interest-bearing and custody accounts. 'WORSE THAN BANKS'Courts will also have to look beyond the user agreements and examine how crypto companies actually handled the deposits, according to bankruptcy specialists. “This is going to have enormous influence on crypto companies and crypto customer behavior."

☆ Bankrupt crypto lender Celsius gets the go-ahead to hand out $2.8 million in bonuses to keep employees from quitting
▼ + stars: | 2022-12-06 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +3 min

Celsius has secured court approval to hand out up to $2.8 million in employee bonuses, per Bloomberg. The payments are meant to keep staff at the crypto lender from quitting as it works to exit bankruptcy. Celsius has also asked the court to let it sell $18 million of user-deposited crypto to pay its bills. The bonuses will be paid to rank-and-file employees to keep operations running while Celsius works on exiting bankruptcy. The crypto lender is due to file a restructuring plan by February 15.

☆ Celsius Shareholders Are Denied Committee Status to Fight Customers for Assets
▼ + stars: | 2022-10-24 | by ( Soma Biswas | ) www.wsj.com time to read: 1 min

A bankruptcy judge declined to grant Celsius Network LLC shareholders an official committee to battle the company’s customers over assets in chapter 11, finding no strong likelihood that equity holders will recoup any of their investments in the business. Equity holders including CDP Investissements Inc. and WestCap Management LLC, which together led a $400 million investment round in Celsius last year, failed to show a substantial likelihood the cryptocurrency lender is still solvent after its chapter 11 filing, U.S. Bankruptcy Judge Martin Glenn ruled Monday. The investors had sought official status in the chapter 11 case, which would have allowed them to bill their legal fees to the bankruptcy estate.

☆ The young lawyer who became the 'Don Quixote' of canceling student debt
▼ + stars: | 2021-05-29 | by ( Cezary Podkul | ) www.businessinsider.com time to read: +24 min

The victory marked the starting point for what's become Smith's raison d'être to help as many student loan borrowers as possible. But of those who did, around 60% managed to get a discharge of some portion of their student debt, Iuliano found. And thanks to a widely-held belief that student debt is categorically exempt from discharge, few are willing to take that chance. "I have $50k student debt, no degree, was a victim of attempted murder, out of work, and homeless," reads another. Austin SmithEventually, he says, he vowed to make it his life's cause to help the student loan borrowers.

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