High-yield cryptocurrency lender Celsius Network (CEL-USD) is weighing the issuance of a new digital token to repay creditors in connection with a proposal to exit its bankruptcy process and reorganize itself as a regulated publicly-traded company, Bloomberg reported Tuesday, citing a court hearing.
The company has held talks with a number of creditor groups on how to set up the new firm as well as issue a new crypto to creditors that has yet to be approved by a federal judge, an attorney representing Celsius, which filed for Chapter 11 protection in July 2022, noted.
Celsius’s former CEO Alex Mashinsky was said to have mulled over a comeback in mid-September 2022 by pivoting the firm to a digital asset custody business. He resigned towards the end of that month, though “I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors,” he said.
Any reorganization plan must first be approved by the company’s creditors, Bloomberg noted, and then U.S. Bankruptcy Judge Martin Glenn would consider that vote before deciding whether to give the proposed revamp the green light.
In early January, a U.S. judge ruled that Celsius owned most of its customer deposits.