Bankrupt crypto lender Celsius has been granted permission to start liquidating its altcoins and convert them into Bitcoin (BTC) and Ether (ETH) starting July 1, 2023. This decision follows discussions with the Securities and Exchange Commission (SEC) and aims to ensure compliance with federal and state regulations.
Key Takeaways
- Celsius can convert altcoins to BTC and ETH starting July 1, 2023.
- The decision follows discussions with the SEC.
- The move aims to comply with federal and state regulations.
- Celsius collapsed in July 2022 and is preparing an updated bankruptcy plan.
- The SEC has recently taken action against major crypto exchanges.
Background
Celsius, a crypto lender that collapsed in July 2022, has been in regular dialogue with the SEC and certain state regulatory agencies regarding the proposed distribution of cryptocurrency under its bankruptcy plan. The company aims to ensure that all distributions are in full compliance with applicable federal and state laws and regulations.
Court Approval
Bankruptcy Judge Martin Glenn of the Southern District of New York approved Celsius’s proposal to liquidate its altcoins. The ruling allows Celsius to sell or convert any non-BTC and non-ETH cryptocurrency, crypto tokens, or other cryptocurrency assets to BTC or ETH starting July 1, 2023. This move is part of Celsius’s preparation for a distribution to creditors that will take place solely in BTC and ETH.
SEC Involvement
The SEC has recently taken action against major crypto exchanges such as Coinbase, Binance, and Bittrex, stating that tokens linked to Polygon (MATIC), Near (NEAR), and Cardano (ADA) fall under securities regulation. This regulatory scrutiny has influenced Celsius’s decision to convert its altcoins to BTC and ETH.
Future Plans
Celsius is preparing an updated bankruptcy plan that, with limited exceptions, will not involve distributions of cryptocurrencies to creditors other than BTC or ETH. The company’s sale to crypto consortium Fahrenheit was approved in May, and it is now focused on ensuring compliance with regulatory requirements.
Impact on the Crypto Market
The decision to convert altcoins to BTC and ETH could have significant implications for the crypto market. By liquidating its altcoins, Celsius may influence the prices of these assets. Additionally, the move highlights the increasing regulatory scrutiny in the crypto space, particularly concerning the classification of certain tokens as securities.
Conclusion
Celsius’s decision to convert its altcoins to BTC and ETH starting July 1, 2023, marks a significant step in its bankruptcy proceedings. The move, approved by a bankruptcy judge and following discussions with the SEC, aims to ensure compliance with federal and state regulations. As Celsius prepares an updated bankruptcy plan, the impact of this decision on the crypto market remains to be seen.
