Bankrupt crypto lender Celsius has been granted permission to liquidate 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 start converting altcoins to BTC and ETH from July 1, 2023.
- The decision was approved by Bankruptcy Judge Martin Glenn of the Southern District of New York.
- The move follows discussions with the SEC to ensure regulatory compliance.
- The updated bankruptcy plan will primarily involve distributions in BTC and ETH.
Background
Celsius, a crypto lending platform, collapsed in July 2022. The company has been in regular dialogue with the SEC and state regulatory agencies to ensure that its proposed distribution of cryptocurrency complies with applicable laws. The sale of Celsius to the crypto consortium Fahrenheit was approved in May 2023.
Court Approval
Bankruptcy Judge Martin Glenn approved Celsius’s proposal to liquidate its altcoins. According to the ruling, Celsius “may sell or convert any non-BTC and non-ETH cryptocurrency, crypto tokens, or other cryptocurrency assets other than such tokens that are associated with Withhold or Custody accounts … to BTC or ETH commencing on or after July 1, 2023.”
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. Celsius has been in discussions with the SEC to ensure that its distribution plan is in full compliance with federal and state laws.
Future Plans
Celsius is preparing an updated bankruptcy plan that will primarily involve distributions in BTC and ETH, barring limited exceptions. This move aims to streamline the distribution process and ensure compliance with regulatory requirements.
Impact on Creditors
Creditors of Celsius can expect distributions to be made solely in BTC and ETH. This decision is part of Celsius’s efforts to comply with regulatory guidelines and ensure a smooth distribution process.
Conclusion
The approval to convert altcoins to BTC and ETH marks a significant step for Celsius as it navigates its bankruptcy proceedings. By working closely with the SEC, Celsius aims to ensure that its distribution plan is compliant with all applicable laws and regulations.
