A New York judge has allowed cryptocurrency lender Celsius Network to mine and sell Bitcoin (BTC) during its bankruptcy, as stated by Cointelegraph. Since July, 2022, Celsius Network has been in the eye of United States officials after the reports of bankruptcy emerged, through which life savings of several cryptocurrency investors could have been lost.
According to Cointelegraph, during the second day of the case’s hearing, Martin Glenn, chief bankruptcy judge, Southern District of New York, approved Celsius’s request for running BTC mining and selling operations as a way to get back the financial stability. However, Glenn raised concerns about the immediate profitability of BTC mining as he mentioned the upfront investments required for setting up mining ecosystem. In recent developments, the approval given has been restricted to mining and selling the mined BTC. The court prevented Celsius from selling equity or debt investments in other cryptocurrency companies and needed the cryptocurrency lender to reveal information about the assets prior.
On the basis of Cointelegraph’s data, the decision to allow a defaulting cryptocurrency company to start cryptocurrency mining operations came from the concerns made by investors about the outcomes filed by over 250 customers. Despite fears of money running out, the company’s attorney reassured that investing in mining is expected to generate profits for Celsius. The US Department of Justice and Texas State Securities Board, which previously opposed Celsius’s desire to enter BTC mining space, withdrew their objection after Celsius said that it would only sell the mined BTC for cash. Celsius also revealed that BTC price went up by 25% since the company filed the petition.
Moreover, information from Cointelegraph mentioned Singapore based cryptocurrency lending platform Hodlnaut gave up on withdrawals and deposits, which showed poor market conditions and lack of liquidity. Soon after the announcement of suspension of services and token swaps, Hodlnaut revealed its plans to work on recovery.
(With insights from Cointelegraph)