According to the latest news, the bailout plan for bankrupt crypto lending platform Celsius has been blocked by the SEC. The SEC is seeking more information about the assets of the former crypto lender, which is restructuring through bankruptcy, a person familiar with the matter said. Interestingly, the altcoin price jumped after this news.
Celsius hits SEC speed bump, altcoin price jumps!
An ambitious plan to create a new crypto services business from the ashes of collapsed lender Celsius has hit a speed bump at the U.S. Securities and Exchange Commission, according to a person familiar with the matter. The source said the SEC’s Celsius Committee of Creditors and Fahrenheit, an investment vehicle that won a bidding contest in May of this year to issue shares in a new crypto business built on the remaining assets of the bankrupt lender, sought more information on assets owned by Celsius. He said he wanted information. Additionally, the person in question made the following statement:
My understanding is that the SEC requested more information to make a decision. The way I interpret this is that the SEC told the committee what they wanted to see for various parts of the business, and now the committee has to decide what to do with that information.
Interestingly, after this development, Celsius’s native token, CEL, made a leap. While the altcoin was trading at $0.23 during the day, it suddenly jumped to $0.2542. This means an increase of approximately 10%. At press time, the token was trading at $0.2533 with a gain of over 10% in the last 24 hours.
What does the recovery plan foresee?
Arrington Capital, US Bitcoin Corp. and investment vehicle Fahrenheit, which includes Proof Group, received approval for a reorganization plan from a bankruptcy court earlier this month. Fahrenheit’s now-stalled plan for Celsius involved distributing nearly $2 billion worth of Bitcoin (BTC) and altcoin Ethereum (ETH) to creditors, as well as stock in a new company.
According to a filing, the new entity Celsius will run Bitcoin mining operations. Additionally, it will further enhance these operations. In this vein, the altcoin will stake Ethereum and generate income from other illiquid assets. In addition, it will develop new business opportunities. If this does not happen, Celsius will liquidate its assets, according to the approved backup plan. Neither Fahrenheit nor Celsius Committee of Creditors made a statement on the issue. Additionally, SEC officials also declined to comment.
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