Celsius Permitted to Convert Altcoins to BTC, ETH from July 1

The initiative of Celsius Network to turn all cryptocurrency-held assets into Bitcoin and Ethereum has been accepted by the bankruptcy court. 

Payment to Celsius Creditors May Soon be Made Possible

In the platform’s bankruptcy proceedings, Judge Martin Glenn of the Southern District of New York issued the new judgment, indicating that payment to creditors will soon be made possible.

According to the Judge Glenn, 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.”

Regular Dialogues with the SEC

The filing further adds that the firm has “been in regular dialogue with the Securities and Exchange Commission (the “SEC”) and certain state regulatory agencies regarding the proposed distribution of cryptocurrency under the Plan to ensure that all such distributions are in full compliance with applicable federal and state laws and regulations.”

Many Altcoins have been Labeled as Securities by the SEC

Notably, with the SEC’s recent crackdown on significant cryptocurrency exchanges including Coinbase, Binance, and Bittrex, several of the top cryptocurrencies have been labeled as securities. Cardano (ADA), Solana (SOL), and Polygon (MATIC) are the cryptocurrencies that have been labeled by the authority, mandating their consolidation into BTC and ETH.

Celsius has a $2.8 Billion Hole in Balance Sheet

Court records after the firm filed for bankruptcy in July showed that the company had debts worth over $6.7 billion and assets valued just around $9.5 billion, leaving a big deficit in the balance sheet of $2.8 billion. 

In light of such difficulties, the business launched Celsius Network’s auction to raise money in order to pay off its creditors and resolve all outstanding debts. Maximizing the value of their assets is another goal of asset auctions. Pleasantly, an earlier report claimed that consumers of the dissolved company would get up to 72.5% of their cryptocurrency deposit returned.