- The New York Southern District Bankruptcy Court has approved the plan of the bankrupt crypto lending company Celsius Network to convert its altcoins to Bitcoin and Ethereum.
- Despite ongoing bankruptcy proceedings, Celsius was recently acquired by the Fahrenheit crypto consortium in May 2023.
- The proposal was officially approved after discussions between Celsius and the U.S. Securities and Exchange Commission (SEC).
A plan submitted by the bankrupt crypto lending company Celsius Network in collaboration with the SEC has been approved by the New York bankruptcy court.
Celsius Receives Approval from NY Court
The New York Southern District Bankruptcy Court has approved the plan of the bankrupt crypto lending company Celsius Network to convert its altcoins to Bitcoin and Ethereum. The decision was made by Judge Martin Glenn and will pave the way for the distribution of funds to creditors in the near future.
The proposal was officially approved after discussions between Celsius and the U.S. Securities and Exchange Commission (SEC). According to the bankruptcy judge’s decision, the troubled lender has the authority to sell or convert any cryptocurrency assets, except for tokens associated with Withhold or Custody accounts, to BTC or ETH starting from July 2023.
Celsius faced bankruptcy in 2022 due to the collapse of the Terra ecosystem and issues related to Terra (LUNA) / TerraUSD (UST) tokens, delaying the resolution for its creditors. Despite the bankruptcy filing being made months ago, the recent decision has presented new possibilities and extended the process.
During the recent SEC intervention classifying altcoins as securities, many crypto companies have decided to convert their altcoins to BTC and ETH. Notable altcoins classified as securities by the SEC include Cardano, Solana, and Polygon.
The tokens held by Celsius were published in court documents, here are Celsius’ assets;
According to the document filed on June 28, Celsius has $215 million in assets. $70 million of this consists of CEL tokens, $51 million of MATIC, $26 million of ADA, and $17 million of LINK.
Celsius’ New Owners Making New Plans
Despite ongoing bankruptcy proceedings, Celsius was recently acquired by the Fahrenheit crypto consortium in May 2023. The network is now operating under the management of its new owners.
The new owners announced their intention to develop a revised bankruptcy plan. While the details of these plans have not been disclosed yet, it is clear that the assets will be distributed only as Bitcoin and Ethereum. Following the bankruptcy of Celsius Network, companies like Voyager Digital and FTX have had to explore unique strategies to address creditor claims.
