Celsius, the bankrupt crypto lender, has been granted permission to initiate the liquidation of its altcoin holdings into Bitcoin (BTC) and Ether (ETH) before distributing assets to creditors. This decision comes in the wake of the SEC's recent crackdown on various altcoins, prompting Celsius to alter its original distribution plan.
The approval, authorized by Bankruptcy judge Martin Glenn, allows Celsius to sell or convert any non-BTC and non-ETH cryptocurrencies, tokens, or other crypto assets, except those associated with Withhold or Custody accounts, into BTC or ETH. The commencement of this process is set to take place on or after July 1, 2023.
The SEC's classification of several top altcoins as unregistered securities in prominent crypto industry lawsuits played a pivotal role in Celsius' decision to pivot its distribution strategy. In response, Celsius has been actively collaborating with the SEC to ensure full compliance with all relevant federal and state laws and regulations during the distribution process.
Last month, Farenheit, a consortium of crypto investors, successfully acquired Celsius' assets through an auction. The consortium comprises prominent names like US Bitcoin Corp, Proof Group Capital Management LLC, Ravi Kaza, former Algorand CEO Steven Kokinos, and Coinbase.
Celsius, once a thriving platform with 1.7 million users, faced failure last year, leaving 300,000 users with balances exceeding $100. With the recent approval from the bankruptcy court, Celsius is now gearing up to convert its altcoin portfolio to BTC and ETH, setting the stage for asset distributions aligned with the top two cryptocurrencies by market cap.