Bankrupt crypto lender Celsius Network was given the greenlight to start the liquidation of all non-Bitcoin and non-Ethereum altcoins into the two dominant digital currencies.
The new verdict in relation to the platform’s bankruptcy proceedings was pronounced by Judge Martin Glenn of the Southern District of New York and the liquidations will pave the way for the distribution of the funds to creditors in the near future.
The proposal was ratified after the discussion between Celsius Network handlers and the United States Securities and Exchange Commission (SEC). According to the bankruptcy Judge, the embattled lender may “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.”
Celsius Network was one of the first firms to go bankrupt last year after Terraform Labs and its associated tokens Terra (LUNA) and TerraUSD (UST) imploded. Despite its bankruptcy declaration filed months ago, Celsius Network creditors are yet to get closure and the latest verdict has opened up a whole new possibilities in the proceedings.
The need to consolidate the altcoins into BTC and ETH comes amid the latest bouts of crackdowns from the SEC who has been labeling a number of the top altcoins as securities. Some of the altcoins labeled by the regulator include Cardano (ADA), Solana (SOL) and Polygon (MATIC).
While the creditors remain, Celsius Network now has new owners as its sale to crypto consortium Fahrenheit was sanctioned back in May this year.
The new owners have now unveiled their plans to devise an updated bankruptcy plan. While the details of these plans remain unknown, one thing has been confirmed, that the Fahrenheit consortium will not be distributing the assets in any token besides Bitcoin and Ethereum.
Other platforms like Voyager Digital and FTX Derivatives Exchange also went bankrupt after Celsius, all exploring custom approaches to meet the demands of their creditors for a refund. FTX, which said recently it recouped more than $7 billion belonging to creditors, is exploring a plan to reactivate the platform in the near future.
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