According to a decision made by the New York bankruptcy court recently, holders of Celsius’ native token CEL were unsuccessful in their attempt to have CEL valued at $0.80, the price that was in effect on the day the crypto lender filed for bankruptcy in July 2022.
The company claimed against the token holders that trading prices don’t represent reality because the market for CEL was artificially manipulated and that the court may even have valued it at a lower or zero price comparable to what stockholders could expect in bankruptcy.
Judge Martin Glenn also rejected a request from two token holders, Santos Caceres and Otis Davis, to be permitted to participate in the bankruptcy negotiations through a special committee of CEL holders.
Glenn sought to stay out of a contentious dispute with the Securities and Exchange Commission over the regulatory status of CEL and other cryptoassets, saying that “nothing in the motions, this order, or announced at the hearing constitutes a finding under the federal securities laws as to whether crypto tokens or transactions involving crypto tokens are securities.”
The management of Celsius has proposed valuing CEL at $0.25 in an effort to close the business, sell it as soon as possible to the cryptocurrency consortium Fahrenheit, and pay back creditors. This appraisal, which was an increase from the prior $0.20, was included in a disclosure statement for the sale to Fahrenheit that Glenn approved last week.
The market in CEL was essentially established by the firm itself, to the benefit of insiders including the company’s then-Chief Executive Officer Alex Mashinsky, according to Shoba Pillay, an independent examiner Glenn appointed in January. Since then, Mashinsky has been detained by authorities on suspicion of various offences, including market manipulation. He has pled not guilty.The sale plan is up for consideration and voting by creditors after one month.