Celsius Granted Permission to Convert Altcoins to BTC and ETH Following SEC Talks
Celsius, the bankrupt crypto lender, has received approval to liquidate its altcoins and distribute assets solely in bitcoin (BTC) and ether (ETH) to creditors. The move was granted by Bankruptcy Judge Martin Glenn of the Southern District of New York after discussions with the Securities and Exchange Commission (SEC). The SEC has recently classified certain less-used crypto tokens as securities, requiring regulatory approval for their handling.
According to Judge Glenn's ruling, Celsius is authorized to sell or convert any non-BTC and non-ETH cryptocurrencies, crypto tokens, or other cryptocurrency assets (excluding those associated with Withhold or Custody accounts) to BTC or ETH starting from July 1, 2023. Celsius has been engaged in ongoing dialogue with the SEC and state regulatory agencies to ensure full compliance with federal and state laws and regulations regarding the proposed distribution of cryptocurrencies under the bankruptcy plan.
Having experienced a collapse in July 2022, Celsius had its sale to crypto consortium Fahrenheit approved in May. The company is now preparing an updated bankruptcy plan that primarily focuses on distributing BTC or ETH to creditors, with limited exceptions. This approach aligns with the SEC's recent actions against major crypto exchanges, including Coinbase, Binance, and Bittrex, which determined that tokens associated with Polygon (MATIC), Near (NEAR), and Cardano (ADA) fall under securities regulation.
The approval granted to Celsius marks a significant development in the bankruptcy proceedings, allowing the conversion of altcoins into BTC and ETH. This decision streamlines the distribution process and ensures compliance with regulatory requirements. As Celsius moves forward with its updated bankruptcy plan, creditors can anticipate receiving assets in the two most widely used cryptocurrencies, BTC and ETH.
The ongoing scrutiny and regulatory actions by the SEC reflect the evolving landscape of cryptocurrencies and their classification. Investors, industry participants, and stakeholders continue to monitor these developments, as they shape the future of crypto regulations and their impact on various market players.