It is believed that the conversion request came in light of the SEC classifying many altcoins as securities.
Celsius Network, a bankrupt crypto lender established in 2017, has received a green light from the US Bankruptcy Court for the Southern District of New York to convert its altcoin holdings into Bitcoin (BTC) and Ether (ETH).
According to the order issued by Judge Martin Glenn on June 30th, this move allows the conversion of cryptocurrency assets and paves the way for a forthcoming creditor fund distribution.
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Following extensive deliberations with the US Securities and Exchange Commission (SEC), the court's approval is a positive turn of events for Celsius.
Sell or convert any cryptocurrency assets, excluding tokens associated with Withhold or Custody accounts, into BTC or ETH starting from July 1st, 2023.
The firm declared bankruptcy in 2022 following the downfall of the Terra ecosystem and its Terra (LUNA) and TerraUSD (UST) tokens. Despite a lengthy wait, creditors now have a clearer picture of the resolution process, and the verdict has given them renewed hope.
Celsius' move to convert altcoins into BTC and ETH comes amidst a widespread SEC crackdown on altcoins, deemed securities by the regulator.
Other cryptocurrency companies are also opting for a similar strategy, particularly those dealing with Cardano (ADA), Solana (SOL), and Polygon (MATIC), which are among the notable altcoins categorized as securities by the SEC.
Despite the ongoing bankruptcy proceedings, in May, Celsius assets were purchased by the cryptocurrency consortium Fahrenheit. Under new ownership, the network is currently steering towards a revised bankruptcy plan. Specifics have not been divulged, but it has been made clear that the new owners aim to distribute assets solely in Bitcoin and Ether.
The financial turbulence at Celsius Network had ripple effects across the crypto industry, with companies like Voyager Digital and FTX experiencing their own economic hardships.
