[1/2]This illustration taken on June 13, 2022 shows the Celsius Networks logo and a representation of a cryptocurrency.Reuters/Dado Ruvic/Illustration/File photo Obtaining license rights
NEW YORK, Nov 21 (Reuters) – Cryptocurrency financier Celsius Network has scaled back its post-bankruptcy business plans, citing skepticism from U.S. regulators about other business areas it plans to Focused only on coin mining.
Celsius’ restructuring plan also envisaged earning “staking” fees by validating blockchain transactions and managing a traditional portfolio of crypto loans, but in a statement late Monday it announced that He said the policy was changed after receiving “feedback.”
Celsius declined to comment Tuesday. The SEC did not respond to requests for comment.
The U.S. Bankruptcy Court in Manhattan approved Celsius’ Chapter 11 plan on November 9, allowing the company to return cryptocurrencies to customers and form a new company owned by Celsius’ creditors.
The SEC did not specifically state during Celsius’ bankruptcy case whether the new company’s business plan violated U.S. law, but reserved the right to make that determination later.
The SEC has argued in past public statements that most cryptocurrency lending and staking activities should be regulated to ensure customers are fully informed about how their crypto assets are being used. I’ve been doing it.
Celsius said it now plans to retain some assets that would have been transferred to the new company and instead liquidate them as part of the bankruptcy process.
Celsius said bitcoin mining was always going to be the new company’s “core business.”
This change of direction led to further negotiations with Fahrenheit, the consortium of bidders chosen to lead the restructured company. Celsius said it plans to seek court approval of its revised bankruptcy plan in the coming weeks.
Celsius said the new company’s “reduced scope and scale” should lead to lower management fees and increase the amount of crypto that Celsius will return directly to customers from January 2024.
Fahrenheit, which is led by hedge funds Arrington Capital and Bitcoin Inc., did not respond to requests for comment.
New Jersey-based Celsius filed for Chapter 11 protection in July 2022, a month after freezing customer accounts to prevent withdrawals. Once valued at $3 billion, Celsius was one of the biggest crypto crashes of 2022, along with FTX, Voyager Digital, and BlockFi. Cryptocurrency lenders Voyager and BlockFi have decided to completely shut down their operations and return some cryptocurrencies to customers during bankruptcy.
Report by Dietrich Knauth.Edited by: Alexia Galanfalvi and Richard Chan
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