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Celsius Network Receives Approval to Liquidate Altcoins
Celsius Network, the bankrupt crypto lending firm, has received authorization from the U.S. Bankruptcy Court for the Southern District of New York to transform its altcoins into Bitcoin and Ether.
The order, granted by Judge Martin Glenn, sets the stage for distributing the funds to the owed creditors in the foreseeable future.
The approval follows deliberations between Celsius and the U.S. Securities and Exchange Commission (SEC). According to the bankruptcy court's decision, the beleaguered lender is empowered to:
"Initiate the sale or conversion of any cryptocurrency assets, excluding tokens associated with Withhold or Custody accounts, into BTC or ETH starting from July 1, 2023."
A New Chapter for the Bankrupt Lender
Celsius plunged into bankruptcy in 2022 after the downfall of the Terra ecosystem and its Terra (LUNA) and TerraUSD (UST) tokens, leaving creditors in a state of uncertainty. While the bankruptcy process started several months ago, this recent decision brings new opportunities and lengthens the proceedings.
In the wake of the SEC's latest clampdown on altcoins, categorizing them as securities, many crypto firms are opting to convert their altcoins into BTC and ETH. Prominent altcoins tagged as securities by the SEC include Cardano, Solana, and Polygon.
Despite the bankruptcy procedure being ongoing, Celsius was bought by crypto consortium Fahrenheit in May 2023. Under its new management, the network continues to operate.
A Revised Bankruptcy Plan Under New Ownership
The new proprietors have unveiled their plans to formulate a modified bankruptcy plan. While exact details remain undisclosed, it's now evident that the new management intends to distribute assets exclusively in Bitcoin and Ether.
Following Celsius Network's bankruptcy, other companies like Voyager Digital and FTX have faced financial headwinds, leading them to devise innovative strategies to meet creditor demands for repayment.
