According to a recent filing, the Celsius Network has announced the impending shutdown of its app. Launched in 2017, Celsius has recently been surrounded by financial controversies and legal challenges. Amid these challenges are signs of a new dawn as the company prepares to transition to a fresh entity named “NewCo.”
The downfall of Celsius comes after several incidents, most notably the arrest of its former CEO, Alex Mashinsky, on charges of fraud, market manipulation, and scrutiny from the Securities and Exchange Commission (SEC). These challenges have led to significant settlements which aim to return assets to customers and end bankruptcy proceedings.
As a result, the Celsius (CEL) price fell in the previous 24 hours as bears took control of the market, plummeting from $0.1696 to a low of $0.1604. CEL’s price recovered from a previous drop to $0.162 at publication.
CEL/USD 24-hour price chart (source: CoinMarketCap)
Moreover, the Celsius app will cease operations within the next 90 days, as outlined in the company’s revised disclosure statement. The decision comes as the platform gets ready to introduce “NewCo,” an entity managed by the Fahrenheit Group and owned by Celsius’ creditors. The closure means a 90-day window to finalize any withdrawals for current Celsius app users. After this period, access to the app or their Celsius accounts will be restricted.
Bright horizons for creditors
Additionally, Celsius has committed to repaying its creditors, including those who benefitted from the company’s partner programs. As part of this pledge, the company has plans to distribute at least $2.03 billion in cryptocurrency, with fluctuations in cryptocurrency prices taken into account.
To facilitate this, PayPal has been identified as a potential distribution agent for US creditors. The company is still in the process of selecting a distribution agent for international transactions.
Hence, if Celsius fails to appoint an international distribution agent in due time, the app will remain accessible for an additional 90 days, ensuring these creditors receive their due amounts.
The emergence of “NewCo”
With a vision for the future, Celsius wants to start afresh with “NewCo.” This new entity, supervised by the SEC for transparency, will focus primarily on crypto mining and staking operations to maximize stakeholder profitability.
🍎 @FahrenheitHldg won, #BRIC is backup. It’s official. Term sheet included. I’ll cover more on my Space tonight #Celsius Creditors https://t.co/jrCiZ7rv2A 🙏 to all who participated. https://t.co/CSk93ui5Wa
— Simon Dixon (@SimonDixonTwitt) May 25, 2023
Besides, with the assistance of US Data Mining Group, Inc., the mining endeavors of NewCo will kick off. Meanwhile, staking operations will be managed by Proof Group Capital Management. The Fahrenheit Group intends to list NewCo’s stock on NASDAQ, allowing the company to tap into the vast potential of the capital market.
While highs and lows have marked Celsius Network’s journey, the company’s resolve to adapt and evolve suggests a promising future. Only time will tell if “NewCo” can reinvent and regain the trust once placed in Celsius.
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Source: https://coingape.com/celsius-network-announces-app-shutdown-amid-financial-turmoil/