The bankrupt crypto firm plans to send ballots to account holders who will vote on a proposal to restart Celsius as a user-owned company.

U.S. Bankruptcy Judge Martin Glenn has granted bankrupt crypto lender Celsius permission to gather votes from its creditors on a plan to restart as a user-owned firm, which will see around $2 million worth of Bitcoin and Ethereum distributed to creditors.

According to a report from Bloomberg on Monday, Celsius will send out ballots to account holders along with other voting materials that will provide a “plain-language” explanation of its plan to repay users. The Judge’s approval will be contingent on Celsius advisors sharing information about the volatility of the crypto industry and potential challenges to the firm’s mining operation.

The proposed plan would see Celsius restarted as a new firm, managed by investment firm Arrington Capital which is part of the Fahrenheit consortium that won the auction for Celsius’ assets. Celsius customers would be repaid partly through equity in the new company. 

Not everyone was pleased with the proposed terms, with some Celsius creditors objecting to the repayment plan, saying they would be effectively forced to take stock in a risky new venture. Instead of the company’s plan to value CEL at $0.25 per token, the creditors argued that their claims should be paid out in their original value of the tokens.

However, Judge Glenn stated the CEL would not be returned to holders based on the U.S. Securities and Exchange Commission’s (SEC) view that CEL is comparable to a stock in a public company, the value of which would be theoretically wiped out after the firm filed for Chapter 11 bankruptcy protection.

#CELSIUS HEARING LIVE: Judge confirming the US Bankruptcy code requires valuation analysis of $CEL & could be $0. Santos requesting valuation analysis. Alex Mashinsky lawyers up next trying to reverse subordination of AM Ventures & Koala. Judge stating it’s confirmation issue.

— Simon Dixon (@SimonDixonTwitt) August 14, 2023

Meanwhile, federal prosecutors have charged former Celsius CEO Alex Mashinsky with fraud and accused him of manipulating CEL’s price to artificially inflate its value. Last month, the U.S. Department of Justice (DOJ) asked for six to eight weeks to process their evidence against him, meaning discovery will likely be presented in the first week of October.