Celsius Network Approved To Convert Altcoins
Bankrupt crypto lender Celsius Network has received approval from the US Bankruptcy Court for the Southern District of New York to convert its altcoin holdings into bitcoin (BTC) and Ethereum (ETH). This decision allows the company to distribute funds to its creditors in the two most widely used cryptocurrencies.
Starting tomorrow (July 1st), Celsius will sell all creditors' altcoins (except for Custody accounts) and convert them into #Bitcoin and #Ethereum.
More details on https://t.co/2XWwRMKE3L
— Celsians (@CelsiansNetwork) June 30, 2023
Approval to Sell Altcoins
The court order, issued by Judge Martin Glenn on June 30, grants Celsius the authority to sell all its altcoins starting July 1, 2023. By converting its altcoins into bitcoin or ethereum, Celsius aims to maximize the value of its assets. BTC and ETH are known for their liquidity, and by holding these cryptocurrencies, Celsius can generate more liquidity and improve its ability to repay its numerous creditors. The order also permits Celsius to make efforts to maximize the value of altcoins that cannot be sold immediately. This means that the company may choose to hold onto some of its altcoins, hoping for a potential price recovery in the future.
For Celsius, the approval to convert altcoins or sell cryptocurrency assets (except for tokens linked to Withhold or Custody accounts) is a positive development as it seeks to restructure its business and emerge from bankruptcy. The troubles for Celsius began with the collapse of the Terra ecosystem, including Terra (LUNA) and the TerraUSD (UST) stablecoin, which caused financial difficulties for the lender. In July 2022, Celsius Network sought Chapter 11 bankruptcy protection after temporarily suspending withdrawals due to extreme market conditions. The impact of its financial downfall primarily affected retail customers, as indicated in the bankruptcy filings.
New Bankruptcy Plan
However, with the recent court approval, there is newfound hope for Celsius and its users. The company was acquired by the crypto consortium Fahrenheit last May, providing it with a new home and ownership. Under the guidance of Fahrenheit, Celsius plans to create a revised bankruptcy plan. While specific details of the plan have not been disclosed, it is clear that the assets will be distributed exclusively in BTC and ETH.
The bankruptcy saga of Celsius has shed light on the challenges faced by other companies in the industry. Voyager Digital, Vauld, FTX, and several others have also encountered financial difficulties, leading them to explore innovative strategies to meet creditor demands or reassess their operations.
