Celsius creditors to vote on asset sale plan that could recover up to 85% of holdings
- Bankrupt crypto lender Celsius is set to hold a vote on its plan to sell assets to crypto consortium Fahrenheit.
- Celsius creditors will vote between August 24 and September 22, and returns will largely be in Bitcoin and Ethereum.
- According to court filings, creditors can expect between 67% to 85% returns from the sale of the bankrupt lender’s assets.
Bankrupt crypto lender Celsius is exploring the option of selling its assets to crypto consortium Fahrenheit. Former customers are expected to vote on the plan over the next month, a settlement that could help recover part of the creditors’ funds, according to court disclosures released Thursday.
Celsius’ thousands of creditors could be close to recover funds
Crypto lender Celsius filed for bankruptcy protection in mid-July 2022. At the time of its filing, Celsius reported between $1 billion and $10 billion in assets and liabilities, respectively, and more than 100,000 creditors.
Creditors expect to recover between 67% and 85% of their holdings. Celsius’ creditors will be sent ballots to vote on the plan to sell the lender’s assets to Fahrenheit. Creditors will receive their returns in Bitcoin (BTC) and Ethereum (ETH), ranging from 67% for Earn Account holders to 85.6% for those participating in Celsius’ Borrow Program, and 47% for a liquidation of assets.
The voting period begins on August 24 and ends on September 22. The approval from bankruptcy court marks the final step in Celsius’ year-long efforts to return creditors’ funds.
What to expect from the vote to sell Celsius’ assets
In other similar cases, creditors have generally voted in favor of restructuring plans with the aim to recover part of the funds lost. In the case of crypto lender Voyager, nearly 97% of creditors opted to sell the lender’s assets to Binance.US. While the buyer pulled out in the weeks that followed, it is likely that Celsius creditors make a similar choice.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
