Bankrupt Celsius Aims to Raise $14.4M in Bitcoin Mining Rig Credits and Coupons
The bankrupt cryptocurrency lending firm is seeking to raise $14.4 million in so-called Bitmain credits and coupons worth millions in cash, according to Celsius’ interim CEO Christopher Ferraro, the Company intends to sell $7.4 million of coupons and $7 million of credits. Bitmain coupons provide the holder with a 10 to 30 percent discount on future purchases from the company, while the credits provide the owner with a 100% face value cash redemption from the mining rig manufacturer.
Ferraro wrote in court filings that he does not believe Kandahar is interested in using the coupons to acquire mining equipment and, therefore, the Bitmain coupons do not provide any utility to the debtor’s property because the debtor can use these coupons. Don’t want to experiment with buying the latest mining rigs of various types before they expire. The coupon sale, on the other hand, will allow debtors to obtain approximately $7.4 million at a time when liquidity is most needed. Ferraro continues by saying that the value of the coupon on the financial market depreciates significantly as the expiration date of the Bitmain Coupons approaches and that the rate of depreciation is seen to accelerate as expiration approaches. The interim CEO further stated that the debtors are currently in discussions with “six potential buyers.” While the credits do not expire like coupons, they do not transfer due to Bitmain’s updated 2023 terms of service, which restrict the transfer of In court, Ferraro states, “Since Bitmain credits are not directly assignable, the debtors plan to use the credits to purchase mining rigs on behalf of third-party buyers. This third-party approach to Bitmain credits K Celsius will allow about 85-88 of face value.
He argues that due to the potential loss of value from fluctuations in energy and bitcoin prices, it would certainly not be prudent to retain Bitmain credits in any sense and that Bitmain is likely to violate the rules for using these credits, can change. Ferraro sees this as a “golden opportunity” for debtors to sell credits for immediate liquidity, rather than holding loans that may not be of any value to them in the long run.
