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 lending platform that collapsed in July 2022, has been navigating the complexities of bankruptcy proceedings. The company’s sale to the crypto consortium Fahrenheit was approved in May, and it is now preparing an updated bankruptcy plan. This plan will primarily involve distributions of cryptocurrencies to creditors in the form of BTC and ETH, barring limited exceptions.
Court Approval
On Friday, Bankruptcy Judge Martin Glenn of the Southern District of New York approved Celsius’s proposal to liquidate its altcoins. This approval came after extensive discussions with the SEC, which has recently emphasized that a range of less-used crypto tokens are considered securities and require regulatory approval for handling.
Regulatory Compliance
Celsius has been in regular dialogue with the SEC and certain state regulatory agencies to ensure that the proposed distribution of cryptocurrency under the bankruptcy plan complies with all applicable federal and state laws and regulations. The company is now authorized to sell or convert any non-BTC and non-ETH cryptocurrency assets to BTC or ETH starting July 1, 2023.
SEC Actions
The SEC has been active in regulating the crypto space, recently taking action against major crypto exchanges such as Coinbase, Binance, and Bittrex. The regulatory body has stated that tokens linked to Polygon (MATIC), Near (NEAR), and Cardano (ADA) fall under securities regulation. These actions have had significant implications for the crypto industry, including delays in the winding down of bankrupt crypto lender Voyager.
Future Plans
Celsius is preparing an updated bankruptcy plan that will focus on distributing BTC and ETH to creditors. This move is seen as a way to streamline the bankruptcy process and ensure compliance with regulatory requirements. The company aims to avoid the complications that have arisen in other bankruptcy cases, such as the delays experienced by Voyager due to SEC claims.
Conclusion
The approval for Celsius to convert its altcoins to BTC and ETH marks a significant step in the company’s bankruptcy proceedings. By working closely with the SEC and other regulatory bodies, Celsius aims to ensure a smooth and compliant distribution process for its creditors.
