Celsius Network Secures Court Approval to Convert Altcoins into BTC and ETH

Source: Pexels

Celsius Network, the bankrupt crypto lender, has received approval from the United States Bankruptcy Court for the Southern District of New York to convert its altcoins into Bitcoin (BTC) and Ether (ETH). Judge Martin Glenn issued the order, clearing the way for the liquidation process and subsequent distribution of funds to creditors in the near future.

The plan, which was formally endorsed after discussions with the U.S. Securities and Exchange Commission (SEC), grants Celsius the authority to sell or convert its cryptocurrency assets into BTC or ETH, excluding tokens associated with Withhold or Custody accounts, starting from July 1, 2023.

Celsius faced financial distress in 2022 following the collapse of the Terra ecosystem and its associated tokens, Terra (LUNA) and TerraUSD (UST). The bankruptcy filing left creditors awaiting a resolution, but the recent court ruling has opened up new possibilities and extended the proceedings.

In light of the recent SEC crackdown on altcoins, which the regulatory body classifies as securities, numerous crypto firms are opting to convert their altcoins into BTC and ETH. Notable altcoins categorized as securities by the SEC include Cardano, Solana, and Polygon.

Despite the ongoing bankruptcy proceedings, Celsius Network was acquired by crypto consortium Fahrenheit in May 2023. Under the guidance of its new owners, the network continues its operations.

The new owners have revealed their intention to develop a revised bankruptcy plan, although specific details have yet to be disclosed. It is now evident, however, that the owners will exclusively distribute the assets in Bitcoin and Ether.

Following Celsius Network's bankruptcy, other companies such as Voyager Digital and FTX have also faced financial challenges, prompting them to explore unique strategies to address creditor demands for reimbursement.

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