Troubled, cryptocurrency lending platform Celsius has received authorization to sell mined Bitcoins (BTC) to meet operating expenses while in bankruptcy proceedings.
The decision was made by a judge in New York, in the United States, last Tuesday (16). On that date, the parties to the company's bankruptcy proceedings met to resolve a number of issues related to its operations.
According to court documents, today, the company's BTC mining activity generates around 14.2 BTC per day. Celsius and Bitcoin (BTC) Mining ANNOUNCEMENT While the sale of BTC is expected to help restore the platform's financial stability, Chief US Bankruptcy Judge Martin Glenn believes Bitcoin mining would not immediately bring profits to the company. That's because, according to him, Celsius needs to make investments so that the mining infrastructure works at its full capacity. Celsius lawyer Ross Kwasteniet acknowledged that the company would initially lose money.
However, he said Celsius could profit after investing resources in buying computers and building mining facilities.
After some opposition regarding the authorization to sell targeted BTC, the company pledged to only sell the cryptocurrency for cash.
In this way, Celsius will not be able to use BTC as collateral for further loans. "At its core, I think this is a business judgment decision," Glenn said. Of note, on several occasions, the crypto company has reaffirmed that Bitcoin mining would be one of the crucial focus areas in its restructuring.
The company was granted permission, early in its bankruptcy case, to spend $5.2 million on mining efforts. However, Glenn's decision on the sale is restricted to mined BTC. That is, the company will not be able to sell equity or debt investments in other cryptocurrency companies until it provides more information about the assets it wants to sell.
Celsius will return to court on September 1 to obtain approval for a process and timetable for the auction of its assets. Celsius' expenses have been under scrutiny in bankruptcy court since the company filed for Chapter 11 on July 13.
This occurred after the company froze its customers' accounts and withdrawals. No money until October It is worth noting that, according to a document from Celsius filed with the US Bankruptcy Court, the company is about to run out of money by the end of October.
On this date, the company would reach a negative liquidity of almost US$ 34 million, that is, almost R$ 176 million.
The documents revealed that Celsius' real debt is $2.85 billion. However, the company's lawyer maintained that investing in BTC mining will increase Celsius' profits.
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I think is a desperate move to change the business core to make money.
Probably the case. I've witnessed so many crazy rug pulls... it's scary
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Yeah, the crypto market needs to face much turbulence!