The liquidations will make it possible for the money to be distributed to creditors soon.
The plan by cryptocurrency lender Celsius Network to exchange their altcoins for Bitcoin and Ether has been granted by the United States Bankruptcy Court for the Southern District of New York. Judge Martin Glenn made the ruling, and the liquidation process will soon enable the transfer of money to creditors.
Following discussions between Celsius and the U.S. Securities and Exchange Commission (SEC), the proposal was approved, signaling that the scheme had received regulatory approval. According to the bankruptcy judge’s decision, Celsius will be able to sell or convert its cryptocurrency holdings into BTC or ETH as of July 1st, 2023, excluding tokens linked to Withhold or Custody accounts.
Following the demise of the Terra ecosystem and its related tokens, Terra (LUNA) and TerraUSD (UST), Celsius Network risked bankruptcy in 2022. Creditors have been waiting for a resolution since the bankruptcy petition, and the recent court decision opens up new alternatives and lengthens the process.
Many cryptocurrency organizations are choosing to convert their altcoins into BTC and ETH in response to the SEC’s recent assault on altcoins, which it classified as securities. The SEC has classified some well-known altcoins as securities, including Cardano, Solana, and Polygon. This tendency is supported by Celsius Network’s move to convert its altcoins.
The cryptocurrency consortium Fahrenheit purchased Celsius Network in May 2023 despite the continuing bankruptcy procedures. The network is now managed by its new owners, who have said they intend to create a revised bankruptcy plan now that they have taken over.
Although the specifics of these plans have not been made public, it is obvious that the assets will only be dispersed in Bitcoin and Ether.
The bankruptcy court’s approval marks a step forward in Celsius Network’s resolution and clears the way for creditors to get paid. Alternate currencies can be changed into BTC and ETH to speed up the distribution procedure and provide creditors with assets that are more widely accepted and liquid.