New York Judge Allows Celsius to Sell the Bitcoin It Mines

Celsius Network’s financial projections show it is likely to run out of cash by October, but the lender has seen a breakthrough. A New York judge has approved Celsius’s request to sell the Bitcoin it mines while it goes bankrupt.

While the process should restore financial stability to the beleaguered platform, US Chief Bankruptcy Judge Martin Glenn believes Bitcoin mining would not bring immediate profits to the table as Celsius has to do additional investments to set up mining infrastructure.

On the second day of the hearing, the judge nevertheless said he would respect Celsius’ business decision and allow it to continue. The crypto lender, on several occasions, had reaffirmed that Bitcoin mining remained one of the crucial focus areas of its restructuring process.

approval

However, the latest approval is limited to mining and selling mined BTC. As such, the court prohibited Celsius from selling equity or debt investments in other crypto businesses and required the crypto lender to reveal relevant asset data in advance. The court demanded more transparency in this regard.

In the meantime, the judge did not grant the company’s separate request to carry out “de minimis” sales of assets which it did not consider to be central to its activities.

According to Glenn, Celsius was “too vague” about what assets it intended to divest itself of and disclosed details about it very recently. The assets in question include up to $210 million in equity and debt investments in other crypto companies.

Glenn was quoted saying,

“Admittedly, I had no idea that Celsius was planning to sell equity and debt investments from other crypto companies. These are not what I would usually consider “de minimis” assets.

Currently, the crypto credit company is considering larger sales of some or all of its assets in the event of bankruptcy. Reports suggest he will return to court on September 1 to seek approval for a process and timetable for the auction of his assets.

Celsius Storm

CryptoPotato recently revealed that Celsius is set to run out of cash by the end of October this year. According to the filing with the United States Bankruptcy Court for the Southern District of New York, the lender would reach negative liquidity of nearly $34 million. The documents revealed that Celsius’ actual debt is $2.85 billion.

However, the company’s attorney argued that investing in Bitcoin mining would generate profits for Celsius. Due to its financial situation, the US Department of Justice (DOJ), as well as the Texas State Securities Board, had opposed Celsius’ plans to engage in BTC mining.

The agencies, however, withdrew their objection request after the company clarified that it would only sell the mined Bitcoin for cash.

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