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Celsius acquisition nearing completion: Rebranding in June, issuing equity tokens, offering up to 100% compensation to users

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Celsius acquisition nearing completion: Rebranding in June, issuing equity tokens, offering up to 100% compensation to users

The digital asset investment firm NovaWulf has planned to acquire Celsius and will relaunch it into the market after rebranding; meanwhile, Celsius, facing bankruptcy and insolvency, has shocked many by reportedly suing certain creditors.

Celsius Rebrands, Issues New Tokens

NovaWulf acquired Celsius as reported by the Wall Street Journal on February 16, pending approval from the bankruptcy court. However, as CoinDesk pointed out on April 14, NovaWulf is now set to take over all Celsius assets and plans to issue tokenized equity to creditors.

According to legal documents, the Celsius rebrand and creditor compensation plan include several key points:

  1. NovaWulf will manage for five years, with an option to renew.

  2. The new company post-restart will not involve Celsius founders or any affiliation.

  3. Simple creditor classes will be able to recover 70% of liquid crypto assets BTC, ETH, USDC.

  4. Ownership of common stock in the new company will be held 100% by Earn Program creditors.

  5. Equity tokens will be issued on the Provenance blockchain, compliant with SEC disclosure regulations, allowing for public trading.

NovaWulf Acquisition Plan

Celsius Restart Effective as Early as June

The new company's board will be selected by NovaWulf and an official creditor committee, with plans to be effective as early as June 30. NovaWulf also emphasized maximizing creditor claims in litigation for the benefit of Earn Program creditors.

While NovaWulf has committed $45 million, the managed assets could reach up to $2 billion, including:

  • Celsius mining division

  • Pledged cryptocurrencies

  • Loan investment portfolios

  • Other investments

Celsius Earn Program Creditor Claims

Previous reports indicated that the court ruled the funds used by most users on the platform's Earn product were owned by Celsius.

Understanding why the court ruled user deposits belong to the platform: Does depositing coins mean giving up rights? Insights from Celsius bankruptcy case: Judge's ruling remains key

According to legal documents, the distribution of claims for Earn Program creditors includes several key points, with "Simple Creditor Class" referring to users with claims under $5,000, covering 85% of users, as follows:

  • Users with claims ≤ $5,000 can receive 70% compensation in liquid assets BTC, ETH, USDC.

  • Users with claims exceeding $5,000 can opt to join the Simple Class and voluntarily reduce their claim to $5,000.

Creditors with claims exceeding $5,000:

  • Receive "maximum" compensation of 100% in liquid crypto assets minus operational expenses for the new company.

  • Receive 100% allocation of Equity Share Tokens ESTs in the new company.

  • Receive distribution of Management Share Tokens MSTs in the new company, entitling holders to 0.5% of the company's net asset value annually, plus profit sharing.

The plan emphasizes that if liquid assets are insufficient, compensation will be in the form of new equity tokens ESTs and potential interest.

Earn Program Creditor Claim Distribution

Celsius Sues Creditors for $70,000

Celsius has filed a lawsuit against crypto Twitter user Tiffany Fong, who previously gained notoriety for exposing internal Celsius meeting recordings and later conducted an exclusive interview with SBF following the FTX bankruptcy.

According to Tiffany Fong's tweets and legal documents, the financially distressed Celsius, currently undergoing bankruptcy reorganization, has spent over $70,000 in dealing with Tiffany Fong's lawsuit.

It appears that Tiffany Fong has not yet received any court notifications, and she may provide updates on Twitter if there are any developments.