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Troubled crypto lender Celsius Network has caught a break after the judge overseeing the firm’s bankruptcy case gave it permission to sell newly-mined Bitcoin, per a Law360 report.
Judge Martin Glenn of the Bankruptcy Court for the Southern District of New York made the decision on Tuesday despite initial objections, including those related to the costs of Celsius’ Bitcoin mining operations.
Celsius Mining, a subsidiary of Celsius Network, joined its parent company in filing for Chapter 11 bankruptcy protection proceedings last month. Before that, Celsius sold the Bitcoin it mined to fund the company’s operations, with the court’s approval now effectively greenlighting that to continue.
Celsius mined a total of 432.30 BTC (worth about $10.3 million at current prices) in July, according to a document filed ahead of the hearing. The company’s projected operational and capital costs exceeded that amount.
Although Celsius’ filing shows that its Bitcoin mining operations will initially run at a loss, judge Martin Glenn said he would let Celsius proceed with selling mined Bitcoin as he was inclined to believe the company’s business judgment that the move will ultimately provide value to its customers.
"It may turn out to be very wrong, but we'll see," he said.
Bitcoin mining as Celsius’ 'core asset'
Celsius counsel Ross Kwasteniet, however, explained that the initial losses are due to the fact that the firm only began mining last year and is still in the process of building the facility and obtaining mining machines.
Kwasteniet also described Celsius’ Bitcoin mining operations as a "core asset," adding that the company expects the financial situation to improve within the next few months once the setup is complete.
Those objecting to the decision included the Texas State Securities Board. Later, the Lone Star state's financial watchdog said it was satisfied with the approval since it was clarified that the mined Bitcoin would be sold for cash and not loaned or invested.
The counsel for the unsecured creditor's committee, which last week moved to block Celsius from selling its mined Bitcoin, and the U.S. Trustee's Office dropped their objections, too, saying they were satisfied with the information Celsius had provided about the company’s finances and budget.
However, Shara Cornell of the U.S. Trustee said the office remained opposed until it could obtain more information about the costs of the company's mining operation.
"We need more information so we can make a reasonable determination," said Cornell.