Celsius Network Cleared to Sell Mined Bitcoin to Fund Its Operations

UTC by Benjamin Godfrey · 3 min read
Celsius Network Cleared to Sell Mined Bitcoin to Fund Its Operations
Photo: Depositphotos

With its bankruptcy proceedings well underway, Celsius Network’s customers are trying to point out what the green light at the end of the tunnel is.

Beleaguered crypto lending platform Celsius Network has been given the clearance to sell the Bitcoin (BTC) assets generated from its mining subsidiary in its ongoing bankruptcy hearing. According to a report by Law 360, Judge Martin Glenn of the Bankruptcy Court for the Southern District of New York made the call, a massive switch from the earlier positions and objections raised against the move.

Celsius Mining is a subsidiary that was set up with one of its core purposes being to mine BTC that can be used to power the day-to-day operations of the firm. The subsidiary has been playing this role for a while and while it joined the parent company in filing for bankruptcy, the new allowance from Judge Glenn will allow it to continue its mining, and sales as usual.

As shown in a court document filed ahead of the hearing, the mining subsidiary mined a total of 432.30 BTC (worth about $10.3 million at current prices) in July. Despite these impressive mining figures, the filings show that the parent company’s expenses typically exceed this amount.

From the current realities, the Celsius Mining operations are bound to operate at a loss in the short term, but the outlook in the long term is positive. Judge Glenn is aware of the short-term outlook but said he is allowing the mined Bitcoin sales as he is convinced the firm’s operations will provide value to the company’s customers in the long term.

“It may turn out to be very wrong, but we’ll see,” he said.

Celsius’s counsel Ross Kwasteniet considers the mining outfit and the Bitcoin that is being generated as a “Core Asset” for the firm. Kwasteniet acknowledged how suboptimal the firm has been operating but he said things are bound to change once the right infrastructures have been put in place.

Celsius Network and the Perceived Light at the End of the Tunnel

With its bankruptcy proceedings well underway, Celsius Network’s customers are trying to point out what the green light at the end of the tunnel is.

The company lost some of its goodwill in its bankruptcy proceedings last week as it was uncovered that the deficit on its balance sheet was much more than it reported in its bankruptcy filing. Per its coin report, it was revealed that the firm has a net liability of $6.6 billion and total assets under management at $3.8 billion, pegging the debt at $2.8 billion.

This contrasts with the $1.2 billion it declared per its report of an asset base of $4.3 billion and $5.5 billion in liabilities. In all of this, Celsius Network has still been drawing interest from top industry firms like Ripple Labs Inc, as many are looking for avenues with which they can tag along in the embattled firm’s restructured future.

Bitcoin News, Blockchain News, Cryptocurrency news, News
Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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