Altcoin holders who are owed money by Celsius will be able to convert their altcoins into Bitcoin and Ether as of July 1, according to a recent ruling by a New York court.
Celsius, a company that declared Chapter 11 bankruptcy protection in July 2022, acknowledging its substantial debt of up to $10 billion, temporarily halted withdrawals just prior to the bankruptcy filing.
Since then, Celsius has been actively collaborating with regulatory authorities to facilitate the repayment of funds to its debtors.
Now, with the court’s decision, individuals who are owed money can initiate the process of converting their altcoins into Bitcoin and Ether, providing them with an opportunity to retrieve their assets.
Celsius Regulatory Discussions And Altcoin Conversion
In light of regulatory developments that categorized various digital assets, such as MATIC, SOL, ADA, and others, as securities, the crypto firm Celsius disclosed that it engaged in discussions with the US Securities and Exchange Commission (SEC).
These discussions aimed to address the implications of the regulatory actions on the company’s operations.
In a significant development, Judge Martin Gleen, in a filing dated June 30, granted Celsius the authority to make “commercially reasonable efforts” to maximize the value of the altcoins held by the company.
These altcoins can now be sold or converted into Bitcoin (BTC) or Ethereum (ETH). The court-approved step allows Celsius to leverage the potential benefits associated with BTC and ETH.
Moreover, the court issued a directive for the bankrupt firm to submit a monthly report known as the “Budget and Coin Report.”
This report will provide details on the number of altcoins that have been converted to BTC and ETH. The court also specified that Celsius is only permitted to distribute cryptocurrencies to its creditors in the form of BTC and ETH, limiting the options to the top two cryptocurrencies.
These court-approved measures and reporting requirements aim to ensure transparency and accountability in the asset conversion process while safeguarding the interests of the creditors involved.
Celsius Network Acquired By Fahrenheit Consortium
Amidst the ongoing bankruptcy proceedings, Celsius underwent a significant development when it was acquired by the crypto consortium known as Fahrenheit in May 2023.
Under the stewardship of the new owners, Celsius is set to embark on a fresh trajectory with a revised bankruptcy plan. While the specifics of this plan are yet to be unveiled, it has been made clear that the distribution of assets will be exclusively carried out in Bitcoin and Ether.
This strategic decision could have implications for the creditors and the overall financial outlook of the company.
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