More than 98% of creditor groups of the insolvent crypto lender Celsius have voted in favor of the proposed reorganization plan, which will return between 67% and 85% of their investments.

Additionally, Celsius’ creditors will get equity in a newly formed entity, tentatively called “NewCo,” according to a voting declaration filed by restructuring agency Stretto on September 25.

The reorganization plan was approved despite objections from the U.S. Trustee, the DoJ-backed entity responsible for overseeing the administration of bankruptcy cases and private trustees involved in those cases.

The final confirmation of the plan's implementation still awaits approval from the U.S. Bankruptcy Court in New York's Southern District, with a hearing scheduled for October 2.


The proposed plan, outlined in documents disclosed on August 17, details the distribution of approximately $2 billion worth of Bitcoin and Ethereum among Celsius Network's creditors.

"NewCo" is envisioned as a platform that will expand Celsius’ existing Bitcoin mining operations, hold stakes in Ethereum, liquidate other assets owned by the debtors involved in bankruptcy proceedings, and explore new business opportunities while adhering to regulatory requirements.

The management team tasked with overseeing "NewCo" will be led by individuals from the Fahrenheit Group, which won a bid to acquire Celsius Network in May 2023.

Backed by Bitcoin mining company US Bitcoin Corp, venture capitalists Arrington Capital and Proof Group Capital Management, as well as Steven Kokinos, the former CEO of Algorand, Fahrenheit Group will also supply the necessary capital, management team, and technology to establish and operate the new public entity, ensuring compliance with relevant regulations.


Celsius didn’t immediately respond to Decrypt’s request for comment.

Is Celsius' bankruptcy nearing the end?

Celsius Network once held a prominent position in the global digital asset landscape, claiming to oversee a staggering $25 billion in assets under management as of October 2021.

The firm allowed users to deposit various digital assets, including Bitcoin and Ethereum, to earn interest and take out loans by using their cryptocurrencies as collateral.

Celsius filed for bankruptcy last year during the crypto market downturn, with the company’s former CEO Alex Mashinsky being arrested in July, exactly one year after the business went bust. Mashinsky was later released on bail after agreeing to a $40 million personal recognizance bond.

The resounding approval from creditors marks a significant step forward in the Celsius Network's bankruptcy proceedings, potentially paving the way for a structured and equitable resolution that will benefit all stakeholders involved.

The news of Celsius creditors voting in favor of the proposed restructuring plans, however,  comes hot on the heels of The U.S. Securities and Exchange Commission (SEC) voicing objections to the bankrupt company’s plan to use cryptocurrency exchange Coinbase as a distribution agent for international customers.

The SEC sued Coinbase earlier this year, and now it believes that the plan to use the exchange service may “implicate many of the concerns” raised in its lawsuit.

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.