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Celsius, one of several bankrupt cryptocurrency lenders in the industry, was given the green light to begin liquidating its altcoin holdings on July 1. according to a decision on June 30.
From July 1, the decision comes as the company, which declared bankruptcy last year, prepares to distribute repayments to its creditors exclusively in Bitcoin (BTC) or Ether (ETH), the two cryptocurrencies. the most important:
“(Celsius) may sell or convert any non-BTC and non-ETH cryptocurrency, crypto tokens, or other cryptocurrency assets other than these tokens that are associated with holding or custodial accounts (collectively, “Altcoins”) in BTC or ETH from or after July 1, 2023.
The approval was made by Bankruptcy Judge Martin Glenn of the Southern District of New York and proposed by Celsius following extensive consultations with the United States Securities and Exchange Commission (SEC). The Commission recently classified a variety of less common crypto tokens as securities, requiring regulatory approval for their management, as the SEC has the right “to challenge transactions involving crypto assets on any basis.”
Celsius has maintained an ongoing conversation with the SEC and other state regulators with the goal of ensuring that the proposed cryptocurrency distribution under the plan is in full compliance with all federal laws and regulations and relevant states.
Celsius, which suspended withdrawals in June 2022 and collapsed in July 2022, was approved for sale to crypto consortium Fahrenheit in May. The bankruptcy plan, with a few exceptions, will not involve distributions of cryptocurrency to creditors beyond BTC or ETH:
“Out of an abundance of caution, and without admitting the status of any particular token as a security under U.S. securities laws, Debtors (Celsius) intends to sell or convert such tokens pursuant to applicable exemptions U.S. Securities Market.”
The SEC has recently flexed its regulatory muscle against major crypto exchanges such as Coinbase, Binance, and Bittrex. However, crypto industry leaders won’t back down, with Blockchain Associating calling on Gensler to take a step back:
“Now is the time for Chairman Gensler to recuse himself from all decisions related to digital asset enforcement matters. If he refuses, I expect enforcement targets to start raising the issue of his disqualification in SEC proceedings and in federal district courts.