Celsius Network moves with altcoin conversion

The Bankruptcy Court for the Southern District of New York has approved Celsius Network to convert altcoins to Bitcoin and Ethereum’s Ether.

The plans of Celsius Network, a cryptocurrency lender facing bankruptcy, to move altcoins to Bitcoin ($BTC) and Ether ($TH) were approved by bankruptcy Judge Martin Glenn. The approval allows the sale and conversion of crypto assets (with certain exceptions) into the leading two cryptocurrencies. This will help the lender create liquidity in order to allocate funds to creditors.

The plan was approved following negotiations and discussions between Celsius and the US Securities and Exchange Commission (SEC). In official court documents, Glenn noted that Celsius would be able to:

“Sell or convert any cryptocurrency assets, excluding tokens associated with Withhold or Custody accounts, into BTC or ETH starting from July 1, 2023.”

Celsius Network’s bankruptcy

Celsius filed for bankruptcy this time last year after the industry-wide rattle of the Terra collapse. The crash of Terra’s network, including Terra ($LUNA) and TerraUSD ($UST) took a massive toll on certain platforms. With new plans to pay creditors, Celsius might have other options on the cards, alternative to its bankruptcy filing. This also follows the acquisition of Celsius by Fahrenheit earlier this year, in spite of its bankruptcy filings.

Fahrenheit has yet to announce any specific details of the plans to resolve Celsius’s bankruptcy. It has become noted, however, that the new owners will only be transacting Bitcoin and Ether with no implication that it will be carrying any other altcoins in the future.

The recent SEC regulations on altcoins, now defined as securities, have led many firms such as Celsius to convert altcoins to fiat, BTC or ETH. This means that volumes of altcoins such as Cardano ($ADA), Solana ($SOL), and Polygon ($MATIC) are being withdrawn to reduce the risk of platforms carrying securities assets illicitly without licenses.