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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

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As bankruptcy begins, cryptocurrency lender Celsius defends its ambitions for bitcoin mining

As bankruptcy begins, cryptocurrency lender Celsius defends its ambitions for bitcoin mining
Celsius logo and representation of cryptocurrencies are seen in this illustration taken. REUTERS/Dad... Celsius logo and representation of cryptocurrencies are seen in this illustration taken. REUTERS/Dado Ruvic/Illustrations
As bankruptcy begins, cryptocurrency lender Celsius defends its ambitions for bitcoin mining
Celsius logo and representation of cryptocurrencies are seen in this illustration taken. REUTERS/Dad... Celsius logo and representation of cryptocurrencies are seen in this illustration taken. REUTERS/Dado Ruvic/Illustrations

Bitcoin mining is essential to the company’s reorganization efforts, according to cryptocurrency lender Celsius Network, who made the statement at a Manhattan bankruptcy court hearing on Monday.

Headquartered in New Jersey, U.S. Bankruptcy Judge Martin Glenn gave Celsius permission to spend $3.7 million on building a new bitcoin mining facility and $1.5 million on customs and fees on incoming bitcoin mining equipment.

The firm, which stopped other commercial activities, including its cryptocurrency loans, might find a way to pay back consumers whose assets it had frozen in the weeks before declaring bankruptcy, according to Patrick Nash, a lawyer representing Celsius.

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“In a world where the crypto market rebounds, the mining business has the potential to be quite valuable,” Nash said.

On July 13, Celsius declared bankruptcy, citing a $1.19 billion balance sheet shortfall. Following a significant cryptocurrency market sell-off caused by the May collapse of prominent coins terraUSD and luna, the business model of crypto lenders came under criticism.

Due to the significant volatility, Celsius’ assets decreased, and its decision to freeze client accounts was an effort to reduce losses and stabilize its operations, according to Nash.

In the weeks leading up to the Chapter 11 filing, some customers threatened and sent hate mail to a few firm workers. Celsius is hoping that the mining endeavor will help it mend those relationships.

However, a group of equity investors hinted at a potential conflict over ownership of the bitcoin mining businesses. Dennis Dunne, the investors’ attorney, can contend that the freshly created currencies need to be given to all Celsius creditors rather than deemed the property of the U.K. company that acquired the money for the mining activity.

Customers could complain about Celsius’ expenditure on bitcoin mining companies at a time when their own financial recovery is in doubt, according to the bankruptcy monitor of the U.S. Department of Justice.


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