Following feedback from the U.S. Securities and Exchange Commission (SEC), Celsius is transitioning into a Bitcoin-only mining company, as per a recent court filing.
According to a CoinDesk report on Monday, Celsius will shift to a new entity that solely focuses on Bitcoin mining. This is a change in direction from the previously court-approved reorganization plan which included staking activities as well.
The pivot comes after SEC’s advice on the reorganization plan. CoinDesk reported that the SEC requested more details about the assets of the former crypto lender which caused a delay in the reorganization process.
Earlier, a judge transferred the implementation of the reorganization to Fahrenheit Holdings, a consortium comprising Arrington Capital and U.S. Bitcoin Corp. Fahrenheit secured the bid to take over Celsius in May 2023. The new entity, currently termed as NewCo, was supposed to focus on both mining and staking as per the initial plan.
The bankruptcy court will likely approve modifications to the plan over the coming weeks, with distributions to creditors expected to start in January 2024. The SEC’s feedback led to Celsius intending to apply for shares registration in a new publicly traded Bitcoin mining company owned by Celsius customers, known as the “Mining NewCo”.
“Certain” assets, which were to be transferred to Fahrenheit Holdings, will now be retained by Celsius’s estates for regulatory reasons. These will be administered and monetized by the Plan Administrator and/or Litigation Administrator for the benefit of creditors.