Judge Martin Glenn of the US Bankruptcy Court has permitted Celsius Network to convert all its cryptocurrencies into Bitcoin and Ethereum.
This decision starts liquidating altcoins, excluding Bitcoin and Ethereum, for the bankrupt cryptocurrency lender. Judge Martin Glenn, from the Southern District of New York, ruled, allowing the bankruptcy procedures to proceed.
The liquidation of altcoins will enable the release of funds to creditors. After a debate between Celsius Network and the US Securities and Exchange Commission (SEC), the proposal received approval.
The bankruptcy judge stated that the insolvent lender can sell or convert any cryptocurrency, crypto tokens, or other cryptocurrency assets. However, this does not apply to tokens associated with Withhold or Custody accounts and the selling or conversion can begin on or after July 1, 2023 specifically to BTC or ETH.
Celsius Network filed for bankruptcy last year, along with the collapse of Terraform Labs and its associated tokens. Creditors have been awaiting a resolution, and this recent decision brings new possibilities to the case.
The SEC’s recent enforcement actions have prompted the need to convert altcoins into BTC and ETH. The regulator has classified popular cryptocurrencies like Cardano (ADA), Solana (SOL), and Polygon (MATIC) as securities.
Celsius Network, despite owing money to creditors, has now found new owners as the cryptocurrency group Fahrenheit purchased it in May. The new owners have revealed their intentions to create a modified bankruptcy plan, focusing on Bitcoin and Ethereum as the only dispersal assets.
Other platforms, including Voyager Digital and FTX Derivatives Exchange, have also filed for bankruptcy. They are devising strategies to meet creditor demands. FTX, for example, has announced the recovery of over $7 billion in debtors’ assets and plans to relaunch the platform soon.
