Celsius Network has been authorized to swap altcoins into Bitcoin or Ethereum
July 2, 2023 12:17 AM
In the near future, the funds will be distributed to creditors as a result of the liquidations.
A bankruptcy court in the Southern District of NY has given the green light for the defunct cryptocurrency lender Celsius Network to convert their cryptocurrencies into Bitcoin (BTC) and Ether (ETH).
Judge Martin Glenn granted the ruling→, and the liquidations will clear the way for the monies to be distributed to creditors in the near future.
After discussions involving Celsius and the US Securities and Exchange Commission (SEC), the proposal was officially authorized. According to the bankruptcy judge's decision, the struggling lender is permitted to:
"Shortly after the first of July 2023, you will be able to exchange your cryptocurrency holdings for Bitcoin (BTC) or Ethereum (ETH). This does not apply to tokens held in a Withhold or Custody account."
Celsius, which was subjected to bankruptcy in 2022 due to the failure of the Terra ecosystem and its tokens Terra (LUNA) and TerraUSD (UST), has left creditors waiting for a settlement. Despite the fact that the bankruptcy was filed months ago, the current verdict has opened up new possibilities and delayed the procedures.
Screenshot of the court's cryptocurrency conversion order. Source: Cases.stretto.com
Many crypto companies are considering converting altcoins into BTC and ETH in light of the recent SEC crackdown on altcoins, which the government has classed as securities. The SEC has classified some altcoins as securities, including Cardano (ADA), Solana (SOL), and Polygon (MATIC).
Celsius was acquired by the crypto consortium Fahrenheit in May of 2023, despite the company's ongoing bankruptcy procedures. The company is now under the management of its new ownership group.
The new owners have stated that they intend to create a revised bankruptcy strategy. Although specifics of these plans have yet to be revealed, it is now obvious that the assets will be distributed solely in Bitcoin and Ether.
Following the bankruptcy of Celsius Network, companies such as Voyager Digital and FTX→ had financial difficulties, pushing them to devise novel solutions to meet creditor demands for repayment.