Before creditor distributions, a sell-off has taken place, and these distributions will exclusively be made in the two most popular cryptocurrencies.
Celsius, the bankrupt crypto lender, received approval on Friday to commence liquidation of its altcoins. This is in preparation for a distribution to creditors, which will exclusively occur in the two most widely utilized cryptocurrencies, bitcoin (BTC) and ether (ETH).
Bankruptcy Judge Martin Glenn, presiding over the Southern District of New York, granted approval for Celsius’ proposal following discussions with the Securities and Exchange Commission (SEC). The SEC has recently asserted that various lesser-known crypto tokens are considered securities, thereby requiring regulatory authorization for their handling.
As per Judge Glenn’s ruling, Celsius is permitted to sell or convert any cryptocurrencies, crypto tokens, or other cryptocurrency assets, excluding those associated with Withhold or Custody accounts, into BTC or ETH starting from July 1, 2023.
According to the filing, the company has engaged in ongoing discussions with the Securities and Exchange Commission (SEC) and specific state regulatory agencies to ensure that the proposed cryptocurrency distribution under the Plan adheres fully to applicable federal and state laws and regulations.
Celsius, which experienced a collapse in July 2022 and received approval for its sale to crypto consortium Fahrenheit in May, is currently developing an updated bankruptcy plan. The revised plan, with limited exceptions, will exclude distributions of cryptocurrencies to creditors, except for BTC or ETH.
In recent times, the Securities and Exchange Commission (SEC) has initiated actions against prominent crypto exchanges including Coinbase, Binance, and Bittrex. The SEC has asserted that tokens associated with Polygon (MATIC), Near (NEAR), and Cardano (ADA) are subject to securities regulation.
The recent attempts to wind down the bankrupt crypto lender Voyager faced obstacles due to the Securities and Exchange Commission (SEC) raising concerns about the classification of its VGX token as a potential security. As a result of the resulting delays, Binance.US, which had expressed interest in acquiring Voyager’s assets, withdrew its offer.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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