New Token “AST” for Debt Repayment
Failed crypto lender Celsius Network is considering the possibility of creating new tokens to repay creditors. Bloomberg and others reported. In addition, the bankruptcy court allowed some users to withdraw funds and grant Flair tokens.
The plan is subject to approval by the trustee and financial regulators. Ross M. Kwasteniet, a lawyer for Celsius, said the new asset will be called the “Asset Share Token” (AST).
Celsius creditors who deposit assets above a certain threshold will be eligible to receive AST tokens.
Kwasteniet said that while the token may not allow creditors to fully recover their assets, it would be “beneficial for creditors looking for liquid assets.” The AST token will also be easily traded, similar to other cryptocurrencies.
Flare Token Airdrop
The US bankruptcy court for the Southern District of New York on the 24th also allowed the Flare Token (FLR) to be airdropped to eligible Celsius creditors. Anyone holding 1 or more units of XRP as of the December 2020 snapshot will be eligible for the airdrop and will receive 1 FLR for each XRP.
Cryptocurrency Flair took a snapshot to determine the distribution target in December 2020, and just completed its first token distribution event on January 10, 2020.
Relation: bitFlyer started handling Flare (FLR)
What is airdrop
Free distribution of virtual currency (tokens). There are many cases where the purpose is marketing, such as raising awareness of virtual currency. Airdrops may also occur when the blockchain hard forks and a new virtual currency is born.
Withdrawal permission for some users
In addition, the bankruptcy court also allowed withdrawal of funds in the form of virtual currency that users sent to the platform after the date of Celsius’ bankruptcy filing. Applicable users can receive a refund of the amount after deducting transaction fees.
If the remittance fee exceeds approximately 5.17 million yen ($40,000), it must be approved by the creditors committee.
Celsius suspended withdrawal of customer funds in June following a chain of defaults in the cryptocurrency market after May 2022. In July, Chapter Eleven filed for bankruptcy in the United States. Currently, it is in the process of bankruptcy proceedings on the premise of corporate restructuring.
Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)
A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.
Lawsuit Against Former CEO
On May 5, the New York State Attorney General sued Celsius co-founder and former CEO Alex Mashinsky for defrauding investors of billions of dollars worth of cryptocurrency.
Problems include repeated false and misleading statements about safety, concealment of losses, and failure to register as a securities and commodities trader.
The Attorney General is seeking a ban on Mashinsky from doing business in New York, damages and indemnification, and a waiver of ill-gotten gains.
RelationNY State Attorney General Sues Former CEO Celsius, Who Is In Bankruptcy