Caution: Celsius Suggests New Plan Sell Altcoins For BTC And ETH From July 1

Key Points:

• Celsius intends to convert all altcoins except Bitcoin and Ethereum into this currency with court approval.
• This will not affect tokens held in withholding or escrow accounts, and the sale will begin on July 1.
• The filing states that the conversion will not affect any creditor’s claims.

The Official Committee of Celsius Debtors and Unsecured Creditors plans to convert all cryptocurrencies except Bitcoin and Ethereum into this currency with court permission, according to a document presented on June 14.

According to Celsius’s reorganization plan, it will sell all of its clients’ altcoins, barring custody and account holdings. The proceeds from the altcoin sale, however, will be turned into Bitcoin and Ethereum. It said that the procedure would begin on July 1, 2023. If an objection is raised, the court will examine it during a hearing on June 28, 2023, at 10:00 a.m. ET. According to the document, the conversion will have no effect on any creditor’s claims. Debtors also make every effort to maximize fund exchange.

This move follows the insolvent crypto lender’s declaration that it has chosen Fahrenheit’s plan to manage a new company that has been selected to be owned by its creditors.

Nevertheless, David Adler, Bankruptcy Partner at McCarter & English, warned that a group of borrowers he represents in the case might submit an objection to this proposal. Celsius is not likely to refund their collateral. According to Adler:

“This proposed “treatment” violates every consumer lending law out there (state, federal) and the ad hoc Borrower group will be opposing this plan.”

On Thursday, Celsius filed a revised bankruptcy plan with the New York Bankruptcy Court to reflect the Fahrenheit consortium’s successful bid for its assets. Yet, creditors may object to the idea.

The new company will get between $450 and $500 million in liquid bitcoin as part of the Fahrenheit agreement, and US Bitcoin Corp will build a variety of crypto mining facilities, including a new 100-megawatt facility.

Fahrenheit secured the purchase of Celsius Network, an insolvent crypto lending business whose assets were once valued at almost $2 billion.

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Harold

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