Celsius Network’s Bankruptcy Plan Challenged By Retail Crypto Borrowers With $45M Deal

Retail Crypto Borrowers vs. Celsius Bankruptcy Plan

Angel investor Johan Bronge, who had taken out several bitcoin-backed loans with Celsius prior to the bankruptcy, expressed his concerns in a letter to the court. Bronge pointed out that the proposed plan permits institutional lenders to repay their loans and reclaim their cryptocurrency assets while denying the same option to retail borrowers.

He also objected to the blending of application dates with current market prices in collateral valuations, fearing that this could result in retail borrowers losing more crypto-collateral compared to the discounts accepted by all creditors. Furthermore, Bronge criticized the lack of choices available to creditors, who cannot vote on whether Celsius should shut down or undergo reorganization.

In response to these issues, Bronge has requested the court grant retail borrowers the ability to repay loans and retrieve collateral on par with institutional lenders, maintain the original loan agreement terms, ensure uniform valuation methods for all collateral, and allow creditors to vote on the fate of Celsius.

Celsius and Core Scientific Reach $45 Million Settlement Deal

This development comes alongside a $45 million tentative agreement between Celsius and Core Scientific to settle a longstanding legal dispute. Pending approval in Texas and New York courts, the deal would see Celsius pay $14 million in cash and the remaining amount in adjusted claims, further shaping the future of the cryptocurrency lender.

Last month, Celsius Network obtained approval from a U.S. bankruptcy judge to seek creditor consent for its restructuring plan. The proposal aims to emerge from Chapter 11 as a new entity owned by its creditors.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Source