• Celsius planned on using mining ops to clear debt to creditors
  • That plan is reduced to ashes as its debts and expenses continue to rise
  • The firm is expected to run out of cash by October

Bankrupt crypto lending firm Celsius has been allowed to access the Bitcoin it mined to fund its day-to-day operations and restructuring process despite the resistance from the U.S. Trustee appointed to the case.

The parties involved in the Celsius bankruptcy case met for a second day hearing to discuss the issues related to the crypto lender's operations as it undergoes potential restructuring, The Block reported.

The report confirmed that most of the motions requested by Celsius lawyers were granted by Martin Glenn, chief judge of the U.S. Bankruptcy Court for the Southern District of New York, uncontested and swiftly. These motions included the ability to process payments to critical vendors, taxes and fees, utilities related to business operations, insurance fees and legal counsel.

However, some of the motions were met with resistance during the hearing. Among them was the firm's Bitcoin Sale Motion, which was scrutinized by U.S. Trustee Shara Cornell.

Before facing bankruptcy and liquidity issues, Celsius had plans to dive into the crypto mining industry, which currently generates 14.2 BTC per day, as per court filings.

The firm had used previously mined Bitcoins (totaling around 3,114 BTC in 2021) to expand into crypto mining. During the first day hearing, also covered by The Block, there were several cost-related measures for the mining firm.

Celsius reportedly planned to use its mining operations to pay off its debt to its creditors, including a $750 million inter-company loan that the mining subsidiary took from the crypto lending firm. However, that plan is reduced to ashes as the debts and expenses of Celsius continue to soar.

The crypto lender is on track to run out of cash by October and is expected to reach negative liquidity amounting to nearly $34 million in the same month, a court document filed in the United States Bankruptcy Court of the Southern District of New York Sunday revealed.

Illustration shows Celsius Network logo and representations of cryptocurrencies