Court Approves Celsius Network’s Bankruptcy Exit, Transition to Bitcoin Miner

Court Approves Celsius Network’s Bankruptcy Exit, Transition to Bitcoin Miner

On March 1, 2021, US Bankruptcy Court Judge Mary F. Walrath approved the sale of Celsius Network (Celsius), a digital asset lender, to BTCS Inc., a bitcoin mining and blockchain services company. According to court documents, the transaction was approved by the requisite creditors and approved by Judge Walrath as “fair and reasonable.” This marks the completion of Celsius Network’s bankruptcy exit, allowing the company to transition to bitcoin mining as a means of generating revenue.

The transaction was initially announced on February 18, 2021, with other key stakeholders in Celsius’s bankruptcy case confirming the news on March 1, 2021. BTCS, which operates bitcoin mining operations in multiple locations, including in the U.S. and Europe, will receive all of Celsius’s assets including its proprietary software, workforce, customer funds, and trade secrets. BTCS also purchased all of Celsius’s outstanding debt, including the company’s loan debt with the Center for Economic and Policy Research (CEPR), as well as its obligations to a group of venture capitalists.

At the time of the announcement of the sale agreement, BTCS CEO and Chairman Charles Allen noted in a press release that the Celsius acquisition was part of a larger strategy to transition from bitcoin trading to bitcoin mining. According to Allen, the combined BTCS and Celsius resources will enable the company to offer customers “new and innovative bitcoin mining services and products to securely store and grow their digital assets.”

In addition to the purchase agreement, BTCS and Celsius have also entered into a multi-year strategic partnership that will include joint product development, customer referral agreements, and shared access to exclusive new technologies. BTCS will also provide blockchain and software services to Celsius’s customers, enhancing the user’s experience and allowing for new revenue opportunities.

Celsius’s transition from a lender to a bitcoin miner follows a pattern seen in other digital asset companies. While Celsius was initially focused primarily on providing lending services, the increasing rates of Bitcoin’s value motivated the company to adapt its business model in order to maximize profits. As BTCS and Celsius build their joint mining platform, other digital asset companies may follow suit and enter into bitcoin mining to further capitalize on the value of digital currencies.