Celsius Network’s financial projection shows that it is likely to run out of cash by October, but the lending firm witnessed a breakthrough. A New York judge has approved Celsius’ request to sell Bitcoin that it mines as it undergoes bankruptcy.
While the process is expected to reinstate financial stability for the beleaguered platform, Chief US Bankruptcy Judge Martin Glenn believes Bitcoin mining would not bring profits immediately to the table since Celsius needs to make additional investments to set up mining infrastructure.
On the second day of the hearing, the Judge, nevertheless, said he would respect Celsius’ business decision and allow it to proceed. The crypto lender, on multiple occasions, had reaffirmed that Bitcoin mining remains one of the crucial focus areas in its restructuring process.
However, the latest approval is limited to mining and selling the mined BTC. As such, the court has prohibited Celsius from selling equity or debt investments in other crypto firms and required the crypto lender to reveal relevant data about the assets in advance. The court has demanded more transparency in this regard.
Meanwhile, the Judge did not grant the company’s separate request to make “de minimis” sales of assets that it did not consider to be at the center of its business.
According to Glenn, Celsius was “too vague” about the assets that it intended to dispose of and divulged details regarding it very recently. The assets in question include up to $210 million in equity and debt investments in other crypto companies.
Glenn was quoted saying,
“Certainly I had no inkling that Celsius was thinking of selling investments in equity and debt of other crypto companies. Those are not what I would ordinarily consider to be ‘de minimis’ assets.”
Currently, the crypto lending firm is looking into more significant sales of some or all of its assets while in bankruptcy. Reports suggest it would return to court on September 1st to obtain approval for a process and schedule for auctioning its assets.
CryptoPotato recently revealed that Celsius is on the verge of running out on cash by the end of October this year. As per the filing with the United States Bankruptcy Court of the Southern District of New York, the lender would hit negative liquidity of nearly $34 million. The documents revealed that Celsius’ actual debt stands at $2.85 billion.
However, the company’s attorney maintained that investing in Bitcoin mining will whip up profits for Celsius. As a result of its financial state, the US Department of Justice (DOJ), as well as the Texas State Securities Board, had opposed Celsius’ plans to engage in BTC mining.
The agencies, however, withdrew their objection application after the company clarified that it would only sell the mined Bitcoin for cash.