New York judge allows Celsius to mine and sell Bitcoin

Not even 24 hours after revealing a three-month cash flow forecast threatening total depletion of funds, a New York judge has allowed crypto lender Celsius Network to mine and sell Bitcoin (BTC) during its bankruptcy.

Since July 2022, Celsius Networks has been in the crosshairs of US officials after reports of bankruptcy surfaced, putting many crypto investors at risk of losing their live savings.

During the second day of hearing, Chief Bankruptcy Judge Martin Glenn of the Southern District of New York approved Celsuis’ request to handle BTC mining and selling operations as a way to restore the financial stability.

However, Glenn raised concerns about the immediate profitability of BTC mining, as he rightly pointed out the high initial investments needed to set up mining infrastructure.

The recent approval, however, is only limited to mining and selling mined BTC. The court prohibited Celsius from selling equity or debt investments in other crypto companies and required the crypto lender to disclose information about the assets beforehand.

The decision to allow a failing crypto firm to begin crypto mining operations stems from concerns raised by investors over unfair results filed by over 250 clients – as noted above.

Despite fears of running out of cash by October, the company’s lawyer reiterated that the mining investment will generate profits for Celsius. The US Department of Justice and the Texas State Securities Board, which previously opposed Celsius’ intention to dive into BTC mining, also withdrew their objection after Celsius clarified that it would not sell Bitcoin only mines for cash.

Celsius also revealed during the hearing that BTC prices have increased by 25% since the company filed the petition. The final hearing will take place on September 1, which will see the finalization of the plan before Celsius’s exit and the distribution of funds.

Related: German Crypto Bank Nuri With 500,000 User Files For Insolvency

Singapore-based crypto lending platform Hodlnaut suspended withdrawals and deposits on August 8, citing poor market conditions and lack of liquidity.

Shortly after revealing the suspension of services, including token swaps, Hodlnaut announced that they were working on recovery plans, adding:

“We are consulting with Damodara Ong LLC on the feasibility and timelines of our planned execution plan and strategizing our recovery plan with the best interests of our users in mind.”

After the service was shut down, Hodlnaut suspended all of its social media accounts except for Twitter and Telegram.