A US judge rules that bankrupt cryptocurrency lender Celsius can convert its altcoin holdings into Bitcoin (BTC) and Ethereum (ETH) as a form of financial relief.
In a new court document, Judge Martin Glenn of the Southern District of New York has ruled that starting July 1, the beleaguered crypto company will be allowed to convert all non-BTC and non-ETH cryptocurrencies into the top two digital assets by market. cap.
“The Debtors may, in consultation with the Commission’s advisors, sell or convert any non-BTC and non-ETH cryptocurrency, crypto tokens or other cryptocurrency assets, excluding tokens associated with holding or custodial accounts (collectively, the “altcoins”), to BTC or ETH beginning on or after July 1, 2023 and ending before the plan effective date.”
Celsius must also use “commercially reasonable methods” to try to maximize the value of the altcoins they want to convert to BTC or ETH. Furthermore, according to the report, the company must report monthly on the amount of altcoins they convert to Bitcoin and Ethereum.
Celsius originally filed for bankruptcy in July 2022 after its original assets plummeted by more than 99% and it was unable to process customer withdrawals.
Soon after, the company was hit with a class action lawsuit alleging that it was being run as a “literal” Ponzi scheme, with many of its executives, including Alex Mashinsky, who was the company’s CEO at the time, being blamed as the perpetrators. named.
In early 2023, New York State Attorney General Letitia James sued Mashinsky for allegedly misleading statements to investors and failing to properly record as required by state law.
According to James, the former CEO told investors he would only make risky investments in reputable companies. However, he routinely lent assets to high-risk counterparties.
In May, Mashinsky responded, saying James’ allegations were based on misinformation.
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