Celsius Network’s Proposal to Transform Altcoins into Bitcoin and Ether Approved
The United States Bankruptcy Court for the Southern District of New York has given the green light to bankrupt crypto lender Celsius Network’s proposal to transform its altcoins into Bitcoin (BTC) and Ether (ETH).
Judge Martin Glenn issued the order, which will enable the funds to be distributed to creditors in the near future after the liquidations are completed.
Following negotiations between Celsius and the U.S. Securities and Exchange Commission (SEC), the proposal was officially sanctioned. According to the bankruptcy judge’s decision, the distressed lender is allowed to:
Celsius, which had been declared bankrupt in 2022 due to the breakdown of the Terra environment and its Terra (LUNA) and TerraUSD (UST) tokens, has left creditors in anticipation of a resolution. Although the bankruptcy was filed many months ago, the recent ruling has opened up new possibilities and prolonged the proceedings.
In light of the SEC’s recent enforcement of regulations on altcoins, which they have identified as securities, many crypto businesses are opting to exchange their altcoins for BTC and ETH. Prominent altcoins that the SEC have labeled as securities include Cardano (ADA), Solana (SOL), and Polygon (MATIC).
Celsius Acquired by Cryptocurrency Consortium Fahrenheit, Plans for Modified Bankruptcy Scheme
Despite the bankruptcy proceedings that are still in progress, Celsius was acquired by the cryptocurrency consortium Fahrenheit in May of 2023. The network is now being managed by its new proprietors.
Creditors of Celsius have asserted that Wintermute was involved in “wash trading” – according to a report.
The new owners have declared their aim to create a modified bankruptcy scheme. Although the particulars of these plans have yet to be made public, it is now evident that the owners will exclusively allocate the assets in Bitcoin and Ether.
In the wake of the Celsius Network’s insolvency, firms like Voyager Digital and FTX encountered monetary difficulties, prompting them to devise creative solutions to meet creditors’ requirements for repayment.
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