About four months after commencing voluntary Chapter 11 bankruptcy proceedings, crypto lender Celsius Network is yet to execute the much-talked-about restructuring plan.
The troubled lender has now filed a motion requesting the court’s approval to extend the deadline for the submission of its reorganization plan.
Celsius Files for Extension of Exclusivity Period
Celsius announced the filing on Thursday via Twitter, stating that the work is complex and requires rigorous planning.
The firm claims it is making “substantial progress towards the determination of a value-maximizing path forward” and that any interruptions could compromise the goal of all parties involved. The lender also disclosed that it had to handle some important legal issues before the case could be concluded.
Recall that Celsius Network filed for bankruptcy protection in mid-July, about a month after suspending all withdrawals, swaps, and transfers between accounts.
Although the company has tried to resume withdrawals for a group of customers, it has encountered blocks and objections to the motion.
The embattled crypto lender has also filed for approval to sell its stablecoin reserve to fund operational costs. However, three Texan regulatory agencies objected to the motion, stating that Celsius did not explain why it needed the funds.
While Celsius is moving back and forth on its restructuring process, its now-former CEO Alex Mashinsky resigned in September, saying that his role had become a distraction for the firm.
Less than a week after Mashinsky’s resignation, reports emerged that he mismanaged customers’ funds during his time at the firm.
The former CEO reportedly disclosed to the official unsecured creditors’ committee (UCC) that he withdrew $10 million in May, weeks before the company froze withdrawals.
One of Celsius’s Lifeboats Goes Underwater
Meanwhile, crypto exchange FTX’s CEO Sam Bankman-Fried (SBF), who was planning to bid in the auction for Celsius’ assets, is now suffering from a severe financial crisis.
SBF’s crypto empire FTX and trading firm Alameda Research suffered a significant liquidity crunch earlier this week after reports revealed that Alameda’s balance sheet was majorly made up of the FTX token (FTT). The company and the majority of its affiliates have also filed for Chapter 11 bankruptcy.
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