The beleaguered crypto lender Celsius Network presents a reorganization plan prioritizing its mining subsidiary ‘Celsius Mining’ at its first bankruptcy hearing.
Just last week, Celsius Network filed for Chapter 11 bankruptcy, shocking the community. The first bankruptcy hearing was virtually held before the New York court, and Celsius CEO Alex Mashinsky remained silent during the whole process.
Celsius stated that a significant portion of Celsius’ strategy to recover its losses is reliant on the future earnings of its mining subsidiary, Celsius Mining.
Celsius Mining, however, also owes money. On Monday, Celsius’ attorneys asked the court to approve spending of more than $5M to complete the building of the Texas mining center and to pay duties on mining rigs that are currently sitting with the customs authorities.
Despite the U.S. Trustee, an office of the Department of Justice that is in charge of overseeing bankruptcy administration, approved the request on an interim basis, Chief Judge Martin Glenn of the U.S. Bankruptcy Court in the Southern District of New York did not.
Shara Cornell, an attorney with the U.S. Trustee Program, noted “I’m not clear if construction may or may not be the best avenue for the debtor at this time. Why not just consider liquidating it and move on?”
Attorneys for Celsius argued in opposition, saying that the company had operated more than 43,000 mining rigs and had plans to increase that number to 112,000 sometime in Q2 of 2023.
According to Pat Nash, the principal attorney for Celsius, the mining subsidiary was anticipated to mine 10,100 bitcoins in 2022 and was now mining 14.2 bitcoins per day.
Nash noted, “If everything goes well, in 2023 we hope and expect to be in a position to mine approximately 15,000 bitcoin a day.”
At current market prices, even if Celsius claims to mine 10,100, that would only bring in around $225M, which is far less than what is required to make Celsius’ solvent.
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