Celsius' Overhaul Faces Obstacle Amid SEC Scrutiny

The U.S. Securities and Exchange Commission (SEC) has intensified its scrutiny of the assets held by the former cryptocurrency lender, Celsius, as it undergoes a restructuring process through bankruptcy. This development has thrown a wrench into the ambitious initiative to establish a new cryptocurrency services venture using the remnants of the bankrupt Celsius, with the SEC seeking additional information.

The SEC, in collaboration with the Celsius Creditors Committee and Fahrenheit, an investment entity that triumphed in a bidding competition in May, is currently in an ongoing exchange of information. This collaborative effort aims to gather comprehensive details about the assets within the Celsius estate.

An individual familiar with the matter revealed, 

"My understanding is that the SEC asked for more information to make a determination. The SEC is conveying their expectations to the committee regarding various aspects of the business, and now the committee must decide how to proceed with this information."

Fahrenheit, a consortium including Arrington Capital, U.S. Bitcoin Corp., and Proof Group, achieved approval for its reorganization proposal from a bankruptcy court earlier this month.

The initially proposed plan by Fahrenheit for Celsius involved the distribution of approximately $2 billion worth of Bitcoin (BTC) and Ethereum's Ether (ETH) to creditors, alongside equity in a new company. The envisioned entity aimed to take charge of and expand the Celsius bitcoin mining operations, stake Ethereum, monetize other illiquid assets, and explore new business opportunities, as outlined in a filing.

In the event of the plan encountering obstacles, the approved contingency plan involves winding down and liquidating Celsius' assets. Despite attempts to seek comments from Fahrenheit and the Celsius Creditor Committee, no responses were received. The SEC also declined to provide a comment on the matter. The situation remains dynamic as stakeholders navigate the complexities of restructuring and regulatory compliance in the cryptocurrency landscape.

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