Celsius Introduces Conversion of Digital Currencies to Bitcoin and Ether
Bankrupt lender Celsius Network has been granted permission to convert its cryptocurrency holdings into Bitcoin (BTC) and Ethereum (ETH). The move will allow the company to distribute funds to its creditors in the two most used cryptocurrencies.
Celsius Network, a bankrupt cryptocurrency lender, has been approved by the US Bankruptcy Court for the Southern District of New York to convert its cryptocurrency into bitcoin or ether.
The court order, issued by Judge Martin Glenn on June 30, allows Celsius to sell all of its altcoins as of July 1, 2023.
The decision to convert altcoins into Bitcoin or Ethereum is a strategic move by Celsius as it seeks to maximize the value of its assets, as BTC and ETH are the two most liquid cryptocurrencies. Converting cryptocurrencies into these two assets will allow Celsius to generate more liquidity and improve its chances of paying off its many victims of misfortune.
The court order also allows Celsius to use commercially reasonable efforts to maximize the value of altcoins that it cannot currently sell. This means that Celsius will likely hold some of its altcoins in hopes that their prices will recover.
The approval to transfer digital currencies or sell their crypto-assets, with the exception of tokens associated with abstinence or custody accounts, is a positive development for Celsius as it seeks to restructure its business and emerge from bankruptcy.
After facing financial difficulties due to the collapse of Do Kwon Terra’s ecosystem and its associated tokens, the Terra (LUNA) and TerraUSD (UST) algorithmic stablecoin, Celsius has left its creditors on edge.
In July 2022, Celsius Network sought Chapter 11 bankruptcy protection after temporarily suspending withdrawals in June 2022, citing severe market conditions. The company’s bankruptcy filings indicate that retail customers will bear the primary impact of its financial collapse.
Despite filing for bankruptcy, the latest ruling has opened up new possibilities and glimmers of hope for users of the platform.
This past May, Celsius found a new home when it was acquired by the cryptocurrency consortium Fahrenheit. With this acquisition, Celsius now operates under the direction and ownership of the company.
Celsius’s new owners have revealed their plans to file a revised bankruptcy plan. While the specific details of these plans have not been revealed yet, it is clear that the owners will be distributing the assets exclusively in BTC and ETH.
In the aftermath of Celsius Network’s bankruptcy, other companies such as Voyager Digital, Vauld, FTX, and many others have also faced financial difficulties, prompting them to explore innovative strategies to fully meet creditors’ demands for pay-outs or closures.