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Bankrupt Celsius Can Convert Altcoins to BTC, ETH Starting July 1 Following SEC Talks
The sell-off precedes creditor distributions that will only be made in the two most popular cryptocurrencies.
Updated Jun 30, 2023, 6:33 p.m. Published Jun 30, 2023, 2:22 p.m.
Celsius was granted permission on Friday to start liquidating its altcoins, as the bankrupt crypto lender prepares a distribution to creditors that will take place solely in the two most widely used cryptocurrencies, bitcoin and ether .
Bankruptcy Judge Martin Glenn of the Southern District of New York approved the move, proposed by Celsius after discussions with the Securities and Exchange Commission (SEC), which has lately said a range of less-used crypto tokens constitute securities whose handling needs regulatory approval.
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Celsius “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,” Glenn’s ruling said.
The company has “been in regular dialogue with the Securities and Exchange Commission (the “SEC”) and certain state regulatory agencies regarding the proposed distribution of cryptocurrency under the Plan to ensure that all such distributions are in full compliance with applicable federal and state laws and regulations,” the filing added.
Celsius, which collapsed in July 2022 and whose sale to crypto consortium Fahrenheit was approved in May, says it is preparing an updated bankruptcy plan that, barring limited exception, won't involve distributions of cryptocurrencies to creditors other than BTC or ETH.
The SEC has recently taken action against major crypto exchanges such as Coinbase, Binance and Bittrex, saying that tokens linked to , , and fall under securities regulation.
Recent plans to wind down bankrupt crypto lender Voyager were stymied by SEC claims that its VGX token could constitute a security. Resulting delays meant that Binance.US, which had offered to buy Voyager’s assets, pulled out.
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