TL;DR Breakdown
- Ripple-linked XRP tokens legal ruling is unlikely to have a major impact on the wind-up plans of bankrupt crypto lender Celsius, as its counsel clarified before a New York court.
- The XRP ruling has the potential to impact creditor repayments for those holding Celsius’ token, CEL.
- The Fahrenheit consortium, the successful bidder for Celsius’ assets, plans to focus on less legally contentious ventures, including bitcoin mining and Ethereum staking.
Description
In a recent development in the crypto world, a significant legal ruling regarding the status of Ripple-linked XRP tokens as securities has caused ripples of concern among various stakeholders. However, the landmark judgment is unlikely to have a major impact on the wind-up plans of bankrupt crypto lender Celsius, as its counsel clarified before a … Read more
In a recent development in the crypto world, a significant legal ruling regarding the status of Ripple-linked XRP tokens as securities has caused ripples of concern among various stakeholders. However, the landmark judgment is unlikely to have a major impact on the wind-up plans of bankrupt crypto lender Celsius, as its counsel clarified before a New York court on Tuesday.
Last week, a court ruled that XRP should be considered a security when offered to institutional buyers such as hedge funds. This ruling has caught the attention of Judge Martin Glenn, who is overseeing the parallel bankruptcy proceedings for Celsius. Chris Koeing, representing Celsius through the law firm Kirkland and Ellis, addressed the court, stating that they believe the Ripple judgment will only affect the CEL token issue. He emphasized that the new company poised to take over Celsius is not involved in any securities offerings and does not intend to follow Celsius’ historical business practices.
The Fahrenheit consortium, the successful bidder for Celsius’ assets, plans to focus on less legally contentious ventures, including bitcoin mining and Ethereum staking. Koenig emphasized that their main objective is to steer clear of any regulatory issues and concentrate on these alternative ventures.
Ripple ruling impact on Celsius
Nevertheless, the Ripple ruling has the potential to impact creditor repayments for those holding Celsius’ token, CEL. Under U.S. bankruptcy rules, customer claims related to securities are subject to mandatory downgrade. The estate previously valued the CEL token at $0.20, but there is a possibility that its value could plummet to zero, according to Koenig. Some creditors have contested this valuation and argued that it should be set at $0.81, the apparent price at the time of the bankruptcy filing in July 2022.
In an unfortunate twist, Celsius’ founder and former CEO, Alex Mashinsky, along with Chief Revenue Officer Roni Cohen-Pavon, were charged with multiple fraud counts by the Department of Justice, as well as securities, commodities, and trade regulators. Mashinsky has entered a not-guilty plea, and his legal team has vehemently refuted the charges, deeming them “baseless.”
Reacting to the indictment of Cohen-Pavon, who is an Israeli citizen, a special committee of Celsius’ board convened immediately and authorized his termination, as required by Israeli law. Koenig stated that Cohen-Pavon’s firing is expected to take place once the appropriate legal hearing in Israel occurs. Furthermore, it was clarified that Cohen-Pavon had limited authority concerning the debtors’ day-to-day operations even before this process began.
Parallel to Mashinsky’s arrest, regulators struck various deals with Celsius to prevent any adverse effects on creditor distributions. One of these deals, a stipulation with the Securities and Exchange Commission, supports the regulator’s assertion that both CEL tokens and Celsius’ Earn Interest Account should be classified as securities.
文章来源于互联网:Ripple’s XRP ruling threatens Celsius’ fate, counsel says