Celsius secures Court permission to sell mined Bitcoin
Crypto firm Celsius Network LLC, which has filed for Chapter 11 bankruptcy, has secured Court permission to sell mined Bitcoin. The relevant order was signed by Judge Martin Glenn of the New York Southern Bankruptcy Court on August 17, 2022.
Let’s recall that the debtors sought entry of an order permitting them, on a postpetition basis and consistent with past practice and in the ordinary course of business, to continue to sell, pledge, transfer, assign, or otherwise monetize the Bitcoin generated from their mining activity.
According to the order signed on August 17, 2022, Celsius Mining LLC is authorized, but not directed, to monetize the Bitcoin generated from its mining activity on a postpetition basis through the sale of such Mined Bitcoin for cash in U.S. dollars at arms’-length to unaffiliated third parties.
Such sales may be preceded by the transfer of the Mined Bitcoin to Celsius Network Limited (CNL) for the sole purpose of selling such Mined Bitcoin for cash in USD. In the event an Authorized Intercompany Transfer occurs: (a) such transfer shall be for the sole purpose of selling Mined Bitcoin for cash in USD, (b) CNL shall complete such sale within two business days of the receipt of such Mined Bitcoin, and (c) such sale may be accomplished without further notice and hearing.
In the event an Authorized Intercompany Transfer occurs, until such time that all proceeds of the sale of the corresponding Mined Bitcoin are transferred to Mining’s “operations” account ending in 4445, Mining shall have a superpriority administrative expense claim against CNL under section 364(c)(1) of the Bankruptcy Code for such corresponding Mined Bitcoin.
For the avoidance of doubt, the Debtors will not be authorized to use any Mined Bitcoin or proceeds thereof to satisfy any prepetition loans or claims including, without limitation, the CNL intercompany revolver facility mentioned in the Motion and the Mashinsky Declaration.
As soon as reasonably practicable, but in no event longer than 30 days following the date of the Court’s Order, Celsius Mining will establish, following consultation with the Committee (and with notice to the U.S. Trustee), one or more cryptocurrency exchange accounts with recognized exchanges to enable the direct sale of Mined Bitcoin without the need for CNL to act as intermediary.