Celsius Seeks to Sell $18M of Earn Stablecoins in Bankruptcy Proceedings

Celsius Network asked the court for approval to liquidate $18 million of stablecoins in its Earn account to fund the company’s restructuring plan, the bankrupt crypto lender said on Twitter. The move comes after a bankruptcy court approved Celsius’s request to extend the deadline to present a reorganization plan.

Court to Consider Celsius’ Request to Sell Earn Stablecoins

Celsius Network, a crypto lender that filed for bankruptcy earlier this year, requested approval from the court to sell $18 million worth of stablecoins in its Earn account to finance its restructuring plan, the company wrote on Twitter. However, the move was not welcomed by customers, who argued that the stablecoins in the Earn account belonged to them and that Celsius should not be allowed to liquidate them.

Celsius’s request comes after the bankruptcy court of the Southern District of New York approved the crypto lender’s appeal to extend the deadline to submit a remedial plan. Celsius can now submit the reorganization plan until Feb. 15, 2023. Furthermore, Celsius also said it will use the additional period of time to “continue developing a plan for a stand-alone business.”

Celsius also wrote that the court will decide soon whether to allow the company to liquidate stablecoins. The decision is likely to come next week, the crypto lender wrote.

Earn is product Celsius developed that allows users to earn interest on crypto. In April, the crypto lender announced some changes related to Earn, after which only “verified accredited investors” in the US were allowed to add coins to their Earn accounts.

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Celsius to Give Out $2.8M in Bonuses to Keep Employees from Quitting

In addition to a deadline extension, the bankruptcy court also allowed Celsius to give out $2.8 million worth of bonuses to employees to encourage them to stay at the company. The bonuses are intended for non-executive Celsius employees as the crypto lender works its way to exit bankruptcy.

Last week, Mike Novogratz’s Galaxy Digital won the auction to purchase Celsius’s self-custody platform, GK8. While the financial details remained undisclosed, Galaxy said it bought the platform for a lower price than the $115 million Celsius paid in 2021.

Celsius declared bankruptcy in July in the wake of the LUNA debacle. According to a court filing by consulting firm Kirkland & Elli, Celsius had $2.8 billion in liabilities on its balance sheet.

Do you think Celsius could recover from bankruptcy and win back customers’ trust? Let us know in the comments below.