Bankruptcy Judge Martin Glenn of the US Southern District Court of New York on Friday ordered that bankrupt crypto lender Celsius can begin to sell or convert altcoins to Bitcoin (BTC) and Ether (ETH).
The price of CEL, the native Celsius Network token, rose sharply on Friday, trading above $0.15 with 33% gains in the past 24 hours.
Celsius can sell altcoins for BTC, ETH from July 1
The liquidating of the said altcoins comes ahead of a planned distribution of assets to creditors and will start on or after July 1, the judge ordered.
“The Debtors, in consultation with the advisors to the Committee, 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 (collectively, the “Altcoins”) to BTC or ETH commencing on or after July 1, 2023,” reads part of the ruling.
Celsius is expected to use “commercially reasonable efforts to maximize the value of the Altcoins to be sold or converted to BTC or ETH.” However, with the SEC having recently alleged some of the altcoins held by the crypto lender as securities, the sales are expected to comply with the “applicable exemptions to the US securities laws.”
Among the tokens the US regulator recently highlighted as securities in its cases against Binance and Coinbase include Cardano (ADA), Polygon (MATIC) and Near (NEAR). Celsius holds these and other alts such as Bitcoin Cash (BCH), Litecoin (LTC) and Chainlink (LINK).
The tokens have recently traded higher alongside the broader crypto market and it remains to be seen what impact, if any, the offloading will have on prices.
Here are the Celsius alts FWIW, these will be sold and the proceeds used to buy BTC and ETH. https://t.co/Bp7MWUhstB
— Hal Press (@NorthRockLP) June 30, 2023
Celsius filed for bankruptcy in July 2022 after pausing customer withdrawals amid crypto contagion from the collapse of Terra and Three Arrows Capital.
According to court documents, the company has been in dialogue with the SEC and state regulators as it looked to update its restructuring plan to only distribute crypto to creditors in bitcoin and ether.
