Celsius Has Been Permitted to Sell Mined Bitcoin to Fund Its Operations

According to a report by Law360, a court overseeing the bankruptcy case of the company Celsius Network has given the company permission to sell newly-mined Bitcoin. This is a break for the troubled cryptocurrency lender Celsius Network.

Despite initial objections, particularly those linked to the costs of Celsius’ Bitcoin mining activities, Judge Martin Glenn of the Bankruptcy Proceedings for the Southern District of New York reached the ruling on Tuesday.

Last month, Celsius Mining, a unit of Celsius Network, followed in its parent company’s footsteps by initiating bankruptcy protection proceedings under Chapter 11 of the United States Code. Before then, Celsius had funded the company’s operations by selling the Bitcoin it had mined. The court’s consent has now effectively given the green light to continue doing so.

According to a document submitted to the court, Celsius mined a total of 432.30 Bitcoin in July. The current price of Bitcoin amounts to nearly $10.3 million. The operational and capital expenditures that the corporation anticipated were higher than that amount.

Although Celsius’s filing indicates that its Bitcoin mining activities will at first operate at a loss, Judge Martin Glenn stated that he would allow Celsius to proceed with selling mined Bitcoin because he was likely to believe the company’s decision that step will inevitably offer value to the customer. Although the filing indicates that Celsius’s Bitcoin mining activities will initially run at a loss,

“I may be completely wrong, but we’ll have to see,” he remarked.

Bitcoin Mining Celsius’ Key Operation

Celsius counsel Ross Kwasteniet however, described that the preliminary losses were true because the company only started mining the year before and was still constructing the facility and acquiring mining machinery and equipment. This is the company’s inability to make a profit at the beginning of the mining operation.

In addition, Kwasteniet referred to Celsius’ Bitcoin mining operations as a “key asset,” saying that the firm anticipates a significant improvement in its financial status within the next few months once the new infrastructure is fully operational.

The Texas State Securities Board was one of the organizations that voiced opposition to the ruling. After some time had passed, the agency responsible for overseeing financial matters in the state of the Lone Star stated that it was content with the approval, given that it was made clear that the mined Bitcoin would be sold for cash rather than lent out or invested.

Both the U.S. Trustee’s Office and the counsel for the unsecured creditor’s committee, which just last week moved to restrict Celsius from trying to sell its mined Bitcoin, have dropped their objections, saying that they are satisfied with the information Celsius has provided about the company’s finances and budget. Last week, the counsel for the unprotected creditor’s committee attempted to block Celsius from attempting to sell its mined Bitcoin.

Despite this, Shara Cornell of the United States Trustee’s Office stated that the office would continue to oppose the proposal until it could collect additional data regarding the costs of the company’s mining activity.

Cornell stated that further information was required before a reasonable conclusion could be made.

More Stories: The Coin Center Decides to Legally Challenge the US Tornado Cash Ban

Comments are closed, but trackbacks and pingbacks are open.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More