Source: Pixabay
Bankrupt cryptocurrency lending company Celsius’ recovery plan has hit a road block with the US Securities and Exchange Commission.
Coindesk reported on Monday that the SEC wants more information about the bankrupt crypto lender’s assets, citing a source familiar with the matter.
A continuous exchange of information concerning the assets held by the Celsius estate is underway, involving the SEC, the Celsius Creditors Committee, and Fahrenheit, according to the source.
Fahrenheit, an investment vehicle that emerged victorious in a bidding competition earlier this year, aims to issue shares for a new crypto business built upon Celsius’ remaining assets.
“My understanding is that the SEC asked for more information to make a determination,” the source said. “The way I’m interpreting it is the SEC is telling the committee what they want to see for various parts of the business, and now the committee has to decide what they’re going to do with that information.”
The complete details of Fahrenheit’s staking operation may unfold gradually over time, Yuliya Guseva, a professor at Rutgers Law School, told Bloomberg.
“As every lawyer knows by now, crypto asset classifications are a thorny issue,” she said in an email interview. “To conclude, the successor company will need to tread very carefully because we may expect additional and considerable regulatory scrutiny, particularly from the SEC.”
In July 2022, Celsius initiated Chapter 11 bankruptcy proceedings after the disclosure of a $2 billion deficit in its balance sheet.
Fahrenheit, the investment vehicle comprising Arrington Capital, U.S. Bitcoin Corp., and Proof Group, received approval for its Celsius reorganization plan from a bankruptcy court earlier this month.
Fahrenheit’s halted proposal for Celsius included the distribution of approximately $2 billion worth of Bitcoin and Ethereum to creditors.
Additionally, creditors would receive equity in a newly formed company. The proposed entity was intended to oversee and expand bitcoin mining operations, stake Ethereum, monetize other illiquid assets, and explore new business opportunities, as outlined in a filing back in August.
In a filing made in September, the SEC expressed apprehension regarding Celsius’ plans, saying that they raised concerns similar to those previously settled with the firm, specifically regarding its role as an unregistered broker. In a subsequent filing, Celsius seemed to respond to the SEC’s concerns, indicating that it had engaged in frequent meetings with the SEC and other regulatory bodies.
The post Celsius’ Path to Recovery Hindered by SEC Challenges: Report appeared first on Cryptonews.
