Celsius Reveals Mining-Focused Reorganization Plan at Bankruptcy Hearing

Celsius Network is a crypto lender that allows users to buy, swap, earn, borrow, and send cryptocurrencies on their platform. Celsius also has a subsidiary, Celsius Mining, that mines cryptocurrencies. Both companies are deeply in debt and Celsius recently filed for Chapter 11 bankruptcy. Voyager Digital also filed for bankruptcy on July 6.

The bankruptcy hearing started Monday and documents show that Celsius owes just under $5 billion USD to its customers, while their digital asset holdings dropped to $1.7 billion. Celsius suspended withdrawals on their platform on June 12, after users withdrew nearly $2 billion from deposits after the Terra Luna crash.

As a potential solution, Celsius presented a reorganization plan that heavily focuses on crypto mining from its subsidiary, Celsius Mining. Celsius lawyers asked the court to approve over $5 million in spending to complete construction on a mining facility in Texas. On the opposing side, U.S. Trustee Program attorney asked “why not just consider liquidating it and move on?” Celsius responded by claiming the operation had over 43,000 mining rigs with plans to reach 112,000 in 2023, especially since the company expencted to mine 10,100 bitcoins in 2022. With the increase in mining rigs, the company would be able to mine around 15,000 BTC per year. Another concern is that the 10,100 BTC mined this year would only cover a portion of Celsius’ debt (around $225 million at current prices, while their debt is close to $5 billion).