Indeed, an American judge has recently authorized Celsius, a currently bankrupt cryptocurrency lender, to convert its altcoins into Bitcoin (BTC) and Ethereum (ETH) in order to bring financial relief to the company.
Details of the judge’s decision
According to a new court document, Judge Martin Glenn of the Southern District of New York has decreed that, starting from July 1st, the troubled cryptocurrency company will have the right to convert all non-BTC and non-ETH cryptocurrencies into these two major digital assets in terms of market capitalization. “Debtors, in consultation with committee advisors, may sell or convert any non-BTC and non-ETH cryptocurrency, cryptographic tokens, or other cryptographic assets, other than those tokens associated with retention or custodial accounts (collectively, ‘altcoins’), into BTC or ETH commencing July 1, 2023, and continuing through the effective date of the plan.”
Celsius will also have to use “commercially reasonable” methods to attempt to maximize the value of the altcoins they wish to convert into BTC or ETH. Additionally, the company will have to provide a monthly report on the quantity of altcoins converted into Bitcoin and Ethereum.
Background of Celsius’ bankruptcy
Celsius initially filed for bankruptcy in July 2022 after its native asset dropped by over 99% and it was unable to meet customer withdrawal requests. Shortly after, the company was hit with a class-action lawsuit alleging that it was operated as a “true” Ponzi scheme, naming several of its executives, including Alex Mashinsky, who was then the CEO of the company, as the perpetrators of this fraud.
In early 2023, Letitia James, the Attorney General of the State of New York, sued Mashinsky for allegedly making misleading statements to investors and for failing to properly register as required by state law. According to James, the former CEO would tell investors that he would only make low-risk investments in reputable companies. However, he regularly lent assets to high-risk counterparties.
Mashinsky’s response to the allegations
In May, Mashinsky responded, claiming that James’ allegations were based on misinformation. Don’t forget to stay updated on the latest news from the cryptocurrency world on cryptoview.io.
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