In a recent court decision, Judge Martin Glenn of the Southern District of New York has granted bankrupt crypto lender Celsius the authority to convert its altcoin holdings into Bitcoin (BTC) and Ethereum (ETH) as a means of financial relief.
The ruling, effective from July 1st, allows Celsius to sell or convert all non-BTC and non-ETH cryptocurrencies into the top two digital assets by market capitalization.
As part of the court order, Celsius is required to use commercially reasonable methods to maximize the value of the altcoins during the conversion process.
The company must also provide monthly reports on the amount of altcoins converted to Bitcoin and Ethereum. The decision comes after Celsius filed for bankruptcy in July 2022 due to a significant drop in the value of its native asset and an inability to fulfill customer withdrawals.
Celsius faced additional legal challenges, including a class action lawsuit alleging its operation as a Ponzi scheme and a lawsuit from the New York State Attorney General, accusing former CEO Alex Mashinsky of making misleading statements to investors and violating registration requirements. These legal hurdles further intensified the financial struggles faced by the crypto lender.
