Celsius wants to start repaying its customers; Ethereum ETF fails to live up to expectations; Kazakh crypto miners urge president to ‘cut taxes
Celsius to start repaying customers!
Crypto lender Celsius Network plans to start repaying customers by the end of the year, it told a judge ahead of an October 2 hearing to approve its reorganization plan.
The new company, dubbed “NewCo,” will exit operations with $450 million in seed financing, Christopher Koenig, Celsius’ legal counsel, said in his opening statement at the approval hearing in New York.
A September 29 filing shows that Celsius plans to partially repay its creditors using $2.03 billion in Bitcoin (BTC), Ethereum (ETH) and stock in the new company.
Celsius and its recovery plan
NewCo was backed by a group of companies in a consortium called Fahrenheit LLC, which will manage the mining and staking business.
Judge Martin Glenn, who is presiding over the case, is considering whether to approve Celsius’ restructuring plan. The plan will also need to be approved by security regulators. According to news reports, although the overwhelming majority of votes are in favor, it is being challenged by some creditors.
In a filing at the confirmation hearing, Celsius said:
Debtors are reaching confirmation with a plan that has the support of more than 95 percent of voting account holders, both in number and dollar amount.
If the Celsius plan is approved, it will be one of the first failed crypto platforms to be revived in a Chapter 11 bankruptcy case starting in 2022. Celsius customers have been waiting for a decision since the company halted withdrawals in June 2022 following the collapse of the Terra/Luna ecosystem.
Ethereum ETF fails to live up to expectations
Ethereum Futures ETF signals ‘dead on arrival’ The much-anticipated Ethereum Futures Exchange Traded Fund (ETF) failed to live up to many investors’ expectations after several flavors of the product went live on Monday. According to Eric Balchunas, a senior ETF analyst at Bloomberg, the cumulative trading volume for the ETF on its first day of trading was just under $2 million.
ETFs and the crypto market
US exchanges welcomed several launches earlier this week after the Securities and Exchange Commission (SEC) gave the green light to most ETF offerings from the likes of VanEck, ProShares, Valkyrie and Bitwise. According to shared data, Valkyrie’s combination of bitcoin and ethereum futures ETFs had the highest trading volume at around $787,376 as of 11:15 am on Monday.
The same low volume also characterized ProShares’ offerings, whose Ethereum Futures ETF traded a total of just $284,112.
The main possible reason for the low volume is that the SEC has been adamant about not approving a crypto ETF product. With the Ethereum Futures ETF now live, the SEC is expected to approve more spot bitcoin ETFs in the near future.
Kazakh crypto miners urge president to ‘cut taxes
In Kazakhstan, the world’s third largest market in terms of bitcoin mining volume, local miners have petitioned the country’s leaders to reduce high energy prices.
Kazakhstan’s cryptocurrency mining industry is in a “very difficult situation” due to high energy prices imposed on miners.
Miners believe that this tax-price situation is undermining the government’s efforts to regulate the crypto industry in general and mining in particular. The decision to increase energy taxes on cryptocurrency miners has hit miners hard. It is claimed that the taxes have already cost the country its position among crypto mining leaders such as the US, Russia and China, and that the industry is on the verge of extinction:
If the government does not take urgent action, the cryptocurrency mining industry in the Republic of Kazakhstan will come to an end.
Kazakhstan and cryptocurrency mining
The country introduced a tax on electricity consumption by cryptocurrency mining organisations on 1 January 2022. The law was introduced amid growing national tensions over cryptocurrency miners’ use of the national electricity grid at low tax rates.
Even at the highest prices in Kazakhstan, 1 kWh of electricity costs miners around $0.067, including taxes. In the US, prices average around $0.12 per kWh, excluding taxes. According to Kazakh government data, only $7 million (3.07 billion tenge) in tax payments were received from cryptocurrency miners in 2022.
