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America Chapter Court docket for the Southern District of New York has authorized bankrupt crypto lender Celsius Community’s plan to transform its altcoins into Bitcoin (BTC) and Ether (ETH).
The order was issued by Decide Martin Glenn, and the liquidations will pave the best way for the distribution of the funds to collectors within the close to future.
The proposal was formally authorized after discussions between Celsius and the U.S. Securities and Change Fee (SEC). As per the chapter decide’s ruling, the troubled lender is permitted to:
“Promote or convert any cryptocurrency belongings, excluding tokens related to Withhold or Custody accounts, into BTC or ETH ranging from July 1, 2023.“
Celsius, which confronted chapter in 2022 following the collapse of the Terra ecosystem and its Terra (LUNA) and TerraUSD (UST) tokens, has left creditors waiting for a resolution. Despite the bankruptcy filing months ago, the recent verdict has introduced new possibilities and extended the proceedings.
Amid recent SEC crackdowns on various altcoins, which the regulator has classified as securities, the decision to convert altcoins into BTC and ETH has emerged. Notable altcoins labeled as securities by the SEC include Cardano (ADA), Solana (SOL), and Polygon (MATIC).
Despite the ongoing presence of creditors, Celsius Network has undergone a change in ownership since its sale to the crypto consortium Fahrenheit was officially approved in May 2023. As a result, the network now operates under the stewardship of its new owners.
Related: Celsius creditors allege Wintermute facilitated ‘wash trading’ — Report
The recently revealed owners have announced their intention to develop a revised bankruptcy plan. Although specific details of these plans have yet to be disclosed, one certainty is that the Fahrenheit consortium will exclusively distribute the assets in Bitcoin and Ethereum, excluding any other tokens.
Following Celsius Network’s bankruptcy, similar platforms such as Voyager Digital and FTX Derivatives Exchange also faced financial challenges, prompting them to explore unique strategies to address creditor demands for reimbursement.
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