Celsius Debtors Can Start Converting Altcoins to Bitcoin and Ether Starting Today

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Jai Pratap

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Jai Pratap

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Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

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Last updated: 

June 30, 2023

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The United States Bankruptcy Court for the Southern District of New York has allowed Celsius debtors to trade their altcoins for Bitcoin and Ether starting today. 

The order issued by the bankruptcy judge Martin Glenn on 30th June will also help the distribution of the funds to creditors in the near future.

The proposal to sell and trade cryptocurrencies was approved after the discussion with Celsius and the US SEC. 

The order does not allow the sale or trade of tokens associated with Withhold or Custody accounts.
Celsius filed for bankruptcy following the collapse of Terra on July 13, 2022 as it revealed $10 billion in liabilities. 
 

Celsius Gets New Owners

Crypto consortium Fahrenheit acquired the bankruptcy-ridden crypto lending platform Celsius on May 25, 2023. 

Fahrenheit has announced its intention to develop a revised bankruptcy plan for Celsius Network.

However, details of these plans are yet to be made public. The latest ruling makes it clear that the owners will exclusively distribute the assets in Bitcoin and Ether.

Fahrenheit won the bid to acquire the Celsius Network’s institutional loan portfolio, staked cryptocurrencies, mining unit and other investments. 

As per the ruling, the new company will receive somewhere between $450 million and $500 million in liquid cryptocurrencies. 

Post its acquisition, Celsius is looking to negotiate and file a new plan sponsor agreement with Fahrenheit and a backup plan sponsor agreement with BRIC. 

The crypto lending firm will also file a revised Chapter 11 plan and a disclosure statement post bankruptcy court approval.

The decision to allow Celsius network’s debtors to convert altcoins to Bitcoin and Ether comes amid the US SEC’s ongoing crackdown on crypto exchanges and altcoins. 

The financial regulator has so far classified over 160 cryptocurrencies as securities, including Cardano, Polygon and Solana. Since then, many crypto companies have decided to convert their altcoin holdings to Bitcoin and Ether.