Celsius

Hut 8 agrees to develop mining site to build equity with Celsius creditors

Hut 8’s new mining site in Cedarvale, Texas, will house almost 66,000 miners and be powered by more than 215 MW of energy.

The Canadian Bitcoin (BTC) mining firm Hut 8 has signed an interim agreement to launch a new mining site in Cedarvale, Texas, in connection with the Celsius Network bankruptcy proceedings.

Announcing the news on Dec. 18, Hut 8 said that the mining site will house almost 66,000 miners and be powered by more than 215 megawatts (MW) of energy.

Hut 8 president Asher Genoot said that the agreement targets a “twofold” goal, which is to build equity with creditors of Celsius while also growing the strength of the managed services business. “We anticipate having more than 895 MW of infrastructure under our umbrella once the site is up and running,” the executive noted.

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Celsius faces hurdle as judge hints at new vote for Bitcoin mining shift

Judge Martin Glenn reportedly said that the firm’s proposed transformation into a Bitcoin mining business deviates significantly from the deal creditors initially voted on.

Celsius Network, a cryptocurrency lending platform, might need to secure a fresh vote from creditors for its planned shift to a Bitcoin mining venture, suggested a U.S.

The crypto lender provided details on Nov. 30, of its plan to only mine Bitcoin (BTC) once it emerges from bankruptcy, a scaled-down business that reflects guidance from regulators.

According to a report, Judge Martin Glenn, responsible for Celsius Network’s Chapter 11 proceedings, voiced displeasure on Nov.

Judge Glenn reportedly highlighted that the proposed transformation into a Bitcoin mining business deviates significantly from the deal creditors initially voted on, potentially encountering considerable resistance from creditors.

Celsius recently announced a scaled-back post-bankruptcy strategy, narrowing its focus to Bitcoin mining due to the U.S.

Celsius attorney Chris Koenig reportedly contended during the Nov.

As per the report, two customers, proceeding without legal representation, expressed dissent toward the agreement in the court documents, contending that Celsius should undergo complete liquidation instead.

Related: Celsius grants access to withdrawals for eligible crypto holders

Celsius filed for Chapter 11 protection in July 2022, one of several crypto lenders to go bankrupt following the industry’s rapid growth during the COVID-19 pandemic.

Under the new proposal, Celsius creditors are projected to receive a 67% recovery, surpassing the 61.2% under the previous Fahrenheit arrangement, according to court records.

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Celsius grants access to withdrawals for eligible crypto holders

Eligible participants can withdraw 72.5% of their cryptocurrency holdings minus transaction fees.

Bankrupt cryptocurrency lending platform Celsius has started withdrawals for select users in a crucial development for the company and its clients amid financial instability and legal issues.

According to a filing in the United States Bankruptcy Court for the Southern District of New York, participants in its custody program falling under “Class 6A General Custody Claims” and “Class 6B Withdrawable Custody Claims” are now eligible for fund withdrawals, with a deadline for withdrawals set for Feb.

Eligible participants can withdraw 72.5% of their cryptocurrency holdings minus transaction fees.

Following its bankruptcy filing in July 2022, the platform has navigated various legal obstacles.

Related: Zipmex proposes to pay creditors 3 cents per dollar

In a subsequent update, creditors approved the company’s reorganization plan in September, paving the way to distribute around $2 billion in Bitcoin (BTC) and Ether (ETH). 20 announcement, Celsius said the core business of the NewCo company proposed under its restructuring plan will be Bitcoin mining rather than staking.

Celsius has been maneuvering through bankruptcy proceedings and legal challenges from multiple regulatory entities.

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Celcius reportedly prepping litigation against creditor for leaking internal info

Creditor Tiffany Fong has argued that she hasn’t done anything wrong, asserting that she didn’t break any non-disclosure agreements by reporting on the leaked information.

A court filing indicates that bankrupt crypto lender Celsius Network either intended to, or is potentially looking at taking legal action against crypto blogger and Celsius creditor Tiffany Fong over leaking internal information.

A screenshot shared by Fong shows that she currently has roughly $119,000 worth of crypto assets such as Bitcoin (BTC), Ether (ETH) and Polygon (MATIC) locked on Celsius, after the firm paused withdrawals in mid-June 2022, prior to filing for Chapter 11 bankruptcy the following month.

Since then, she has been actively reporting on the bankruptcy case as it unfolds via YouTube and other social media platforms. On multiple occasions, Fong has shared leaked internal information, which she claims was given to her privately by disgruntled former Celsius employees.

In an itemized sixth monthly fee statement from Celsius’ counsel Kirkland & Ellis International submitted to the bankruptcy court of the Southern District of New York on April 14, the law firm reported that it had worked 77 billable hours worth roughly $72,000 on an invoice titled “Tiffany Fong litigation.”

The law firm’s work on this case started on Jan. 26, with the last recorded hours of work being reported on Feb. 6.

While a concrete legal action doesn’t appear to have been formulated as of yet, the filing shows Celsius’ legal counsel was specifically looking into the leaked information Fong reported on via her social media accounts.

In the filing, Celsius law firm also outlined that it was drafting cease and desist letters for Fong, and also a motion to compel, which generally asks courts to enforce a request for information relevant to a case.

To name a few examples, Fong has reported on leaked internal information relating to company bids on Celsius assets, alleged audio of private company discussions and alleged transaction activity of execs such as former CEO and founder Alex Mashinsky.

Speaking with Cointelegraph, Fong didn’t mince her words as she alleged that Celsius is “using customer funds in an attempt to sue a creditor” over something that she asserts isn’t a legal issue to begin with:

“It’s bullshit I didn’t do anything illegal. I’m not an employee so I didn’t break an NDA [non-disclosure agreement]. I’m a creditor and they owe me 3.1 BTC & 11.6 ETH.”

Cointelegraph has also reached out to Celsius for comment on the potential litigation, and will update this article if the company responds.

Related: Celsius Network to make April 12 filing, including info on voting for restructuring plan

Adding fuel to the fire, Fong is currently in New York attending the 2023 NYC NFT event, and posting on Twitter on April 15, she revealed that found Alex Mashinsky and his wife Krissy Mashinsky out in public, and approached them.

A video posted to Twitter also shows the Mashinsky couple hurriedly walking away as other crypto content creators such as BitBoy Crypto (Ben Armstrong) approach alongside Fong in an attempt to engage them in conversation.

Magazine: Crypto Twitter Hall of Flame: Pro-XRP lawyer John Deaton ‘10x more into BTC, 4x more into ETH

Celsius reportedly prepping litigation against creditor for leaking internal info

Creditor Tiffany Fong argues she hasn’t done anything wrong, asserting that she didn’t break any nondisclosure agreements by reporting on the leaked information.

A court filing indicates that bankrupt crypto lender Celsius Network either intended to or is potentially considering legal action against crypto blogger and Celsius creditor Tiffany Fong over leaking internal information.

A screenshot shared by Fong shows that she currently has roughly $119,000 worth of crypto assets, such as Bitcoin (BTC), Ether (ETH) and Polygon (MATIC) locked on Celsius, after the firm paused withdrawals in mid-June 2022, before filing for Chapter 11 bankruptcy the following month.

Since then, she has been actively reporting on the bankruptcy case as it unfolds via YouTube and other social media platforms. On multiple occasions, Fong has shared leaked internal information, which she claims was given to her privately by disgruntled former Celsius employees.

In an itemized sixth monthly fee statement from Celsius’ counsel Kirkland & Ellis International submitted to the bankruptcy court for the Southern District of New York on April 14, the law firm reported that it had worked 77 billable hours worth roughly $72,000 on an invoice titled “Tiffany Fong litigation.”

The law firm’s work on this case started on Jan. 26, with the last recorded hours of work reported on Feb. 6.

While a concrete legal action hasn’t been formulated yet, the filing shows Celsius’ legal counsel specifically looked into the leaked information Fong reported on via her social media accounts.

In the filing, Celsius’ law firm also outlined that it was drafting cease and desist letters for Fong and a motion to compel, which generally asks courts to enforce a request for information relevant to a case.

To name a few examples, Fong has reported on leaked internal information relating to company bids on Celsius assets, alleged audio of private company discussions, and alleged transaction activity of executives such as former CEO and founder Alex Mashinsky.

Speaking with Cointelegraph, Fong didn’t mince her words as she alleged that Celsius is “using customer funds in an attempt to sue a creditor” over something that she asserts isn’t a legal issue, to begin with:

“It’s bullshit, I didn’t do anything illegal. I’m not an employee, so I didn’t break an NDA [nondisclosure agreement]. I’m a creditor, and they owe me 3.1 BTC and 11.6 ETH.”

Cointelegraph has also reached out to Celsius for comment on the potential litigation but received no response by publication time.

Related: Celsius Network to make April 12 filing, including info on voting for restructuring plan

Adding fuel to the fire, Fong is currently in New York attending the 2023 NYC NFT event. Posting on Twitter on April 15, she revealed that she found Alex Mashinsky and his wife, Krissy Mashinsky, out in public and approached them.

A video posted to Twitter also shows the Mashinsky couple hurriedly walking away as other crypto content creators, such as BitBoy Crypto (Ben Armstrong), approach alongside Fong in an attempt to engage them in conversation.

Magazine: Crypto Twitter Hall of Flame: Pro-XRP lawyer John Deaton ‘10x more into BTC, 4x more into ETH

Celsius Network to make April 12 filing, including info on voting for restructuring plan

“Our Disclosure Statement will provide a summary of the Plan, account-holder recovery percentages, FAQs, and additional information on certain risk factors,” said Celsius.

Bankrupt crypto lender Celsius Network has announced it will be moving forward on its Chapter 11 restructuring plan with a disclosure statement containing information for claim holders.

In a April 7 notice to users, the Celsius debtors said they will file a disclosure statement on April 12. A March 31 court filing in United States Bankruptcy Court for the Southern District of New York said the statement was aimed at providing “adequate information” for claim holders to vote on the proposed restructuring plan sponsored by NovaWulf.

Celsius first presented the plan in February, which proposed creating a public platform fully owned by Earn creditors called NewCo. The committee of unsecured creditors will appoint the majority of the firm’s board members, with no “Celsius founder involvement or relationship.”

According to the debtors’ statement regarding the plan, the April 12 filing will include details of events leading up to Celsius’ bankruptcy, projected recoveries for certain stakeholders should the restructuring plan be approved, and answers to frequently asked questions. The bankruptcy court is expected to conduct a hearing regarding approval of the disclosure statement on May 17, with a vote on the plan to follow.

Related: Celsius publishes list of users eligible to withdraw majority of assets

Since filing for Chapter 11 in July 2022, Celsius’ bankruptcy proceedings in court have included discussions on assets from the firm’s Earn program, crypto holdings, Bitmain coupons, and personal information of its users. In March, the bankruptcy judge approved a settlement plan allowing Celsius custody account holders to get back 72.5% of their crypto.

Magazine: Tiffany Fong flames Celsius, FTX and NY Post: Hall of Flame

Paxful to return lost Celsius funds to Earn users

Peer-to-peer marketplace Paxful will refund its Earn program users impacted by Celsius Network’s bankruptcy.

Crypto marketplace Paxful will refund its Earn program users affected by the Celsius Network collapse in 2022, according to a Twitter thread posted on March 29 by company CEO Ray Youssef.

“I’ve personally taken action and will be refunding all affected Paxful users,” wrote Youssef, explaining that funds will be available for affected users in the platform’s wallet in the coming days.

Celsius filed for Chapter 11 bankruptcy in the United States on July 14, leaving thousands of depositors with their assets locked up on the crypto lending platform. At that time, neither the company nor CEO Alex Mashinsky commented publicly about whether depositors could expect any percentage of their funds. According to the bankruptcy filing, user deposits comprised most of Celsius’ liabilities, at $4.72 billion.

As of now, Paxful has not disclosed how much it is returning to customers. Cointelegraph reached out to Paxful, but did not receive an immediate response. 

During a bankruptcy hearing on Jan. 4, Judge Martin Glenn ruled that Celsius owns the funds in the interest-bearing Earn program under its terms of use, not its depositors. Youssef commented on the decision:

“The collapse [of Celsius] hurt countless users and damaged trust in our industry. Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius. Another hit came when the courts ruled that Celsius Earn Account belonged to Celsius’ bankruptcy estate, not to its users. This didn’t sit right with me then, and it still doesn’t sit right with me today.”

Bankruptcy proceedings for Celsius are still ongoing. Recently, a settlement plan between the committee of unsecured creditors and a group of account holders was approved, allowing account holders to recover 72.5% of their crypto holdings. The defunct platform announced in February that NovaWulf Digital Management would act as a sponsor for its restructuring plan, claiming that over 85% of Celsius customers would be able to recover roughly 70% of their crypto assets.

Celsius custody account holders can receive 72.5% of their crypto, says bankruptcy judge

Should they opt in to the deal, Celsius customers cannot “pursue any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action.”

A bankruptcy judge overseeing the bankruptcy case for crypto lending platform Celsius Network has approved a settlement plan allowing custody account holders to get back 72.5% of their crypto holdings.

In a March 21 hearing, United States Bankruptcy Judge Martin Glenn signed off on an agreement allowing Celsius custody account holders the right to receive 72.5% of their crypto claims provided they approve of the settlement. Under the agreement, the claimants cannot “pursue any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action” and digital assets not part of the settlement will be controlled by the Celsius debtors.

The settlement between the committee of unsecured creditors, Celsius debtors, and an ad hoc group of account holders was the latest development in the lending platform’s case in U.S. Bankruptcy Court for the Southern District of New York since it filed for Chapter 11 in July. The defunct platform announced in February that NovaWulf Digital Management would act as a sponsor for its restructuring plan, in which it was suggested that more than 85% of Celsius customers would recover roughly 70% of their crypto.

Judge Glenn ruled in January that more than $4 billion in funds from Celsius’ interest-bearing Earn program belonged to the lending platform. However, a December ruling ordered roughly $44 million in crypto to be returned to Celsius customers, and a February decision from the judge authorized Celsius debtors to sell $7.4 million worth of Bitmain coupons if needed.

Related: Celsius lawyer and adviser fees on track to reach $144M, community responds

Bankruptcy proceedings for major crypto firms amid the 2022 market crash are ongoing across courts in the United States, now the backdrop for failures of Signature, Silicon Valley and Silvergate ban. On March 17, the debtors in crypto exchange FTX’s bankruptcy case reported a roughly $7 billion shortfall between scheduled assets and claims.

Celsius lawyer and adviser fees on track to reach $144M, community responds

Software developer Cam Crews compiled data showing almost $102 million filed with the courts, with $42 million estimated in additional fees yet to be filed.

Crypto lender Celsius Network’s lawyer and adviser fees amid its bankruptcy proceedings are projected to reach $144 million, triggering responses from crypto community members. 

In a March 21 tweet, software developer Cam Crews shared a spreadsheet compiling the reported fees and projected fees the bankrupt crypto lender must pay. According to the data, almost $102 million has been filed so far. The developer also noted that some months were missing and estimated around $42 million in fees have yet to be paid and filed.

The tweet garnered responses from various crypto community members, with some even comparing the Celsius situation with the current Silicon Valley Bank (SVB) issue, suggesting that creditors start a law firm themselves. 

According to one Twitter user, they were lied to by Celsius founder Alex Mashinsky, and then justice told them that they were at fault. Meanwhile, the community member believes that rich venture capital depositors at SVB had their money covered even though they weren’t insured.

Meanwhile, another community member believes that the lawyers should be compelled to provide “proof-of-work,” asking if there are organizations to audit them in the United States.

Related: Coinbase, Celsius and Paxos disclose funds in Signature Bank

Because of the hefty fees given to lawyers, one community member sarcastically suggested that creditors making their own law firm may be a way to make them whole. According to the Twitter user, they could charge $2,000 until they are paid what they are owed.

On Dec. 29, community members expressed similar sentiments as Celsius expressed its intent to extend the deadline for claims. Some believed it was only a delaying tactic, while others took a jab at the lawyer fees and compared them to what “small folks” would get. 

Coinbase, Celsius and Paxos disclose funds in Signature Bank

The crypto-friendly Signature Bank was a key partner for many crypto firms, some which have been voluntarily disclosing their exposure to the recently closed firm.

Crypto exchange Coinbase, crypto lender Celsius and stablecoin issuer Paxos are among the crypto firms with funds reportedly tied up with the now-shuttered Signature Bank. 

The crypto-friendly Signature Bank was shut down by New York regulators on March 12 in conjunction with the United States Federal Deposit Insurance Corporation to “protect the U.S. economy,” as they claimed the bank posed a “systemic risk.”

Crypto exchange Coinbase tweeted on March 12 that it had around $240 million in corporate funds at Signature that it expected would be fully recovered.

Stablecoin issuer and crypto firm Paxos also came forward, tweeting it had $250 million held at the bank but added it held private insurance that covers the amount not covered by the standard FDIC insurance of $250,000 per depositor.

The Celsius Official Committee of Unsecured Creditors, a body that represents the interests of account holders at the bankrupt crypto lender Celsius, added that Signature Bank “held some of its funds” but did not disclose the amount.

It added that “all depositors will be made whole.”

As Signature Bank serviced so many firms in the crypto industry, those firms with no exposure equally came forward to quell fears about their related exposures.

Robbie Ferguson, co-founder of Web3 game development platform Immutable X, and Mitch Liu, co-founder of the media-focused Theta Network blockchain, separately tweeted that both of their respective companies had no exposure to Signature.

Related: Biden vows to hold those responsible for SVB, Signature collapse

Crypto exchange Crypto.com also reported in a March 12 tweet by CEO Kris Marszalek that it had no funds in the bank

The chief technology officer of stablecoin firm Tether, Paolo Ardoino, similarly tweeted Tether’s non-exposure to Signature Bank.

The announcement of Signature Bank’s forced closure aligned with other banking-related announcements by U.S. regulators.

The Federal Reserve said the FDIC was approved to take actions to protect depositors at Silicon Valley Bank, a tech-startup-focused bank that experienced liquidity issues due to a bank run that spread contagion to the crypto sector.

The Fed also announced a $25 billion program to ensure ample liquidity for banks to cover the needs of their customers during times of turbulence.