• A US judge has granted bankrupt crypto lender Celsius the ability to convert their altcoin holdings into bitcoin (BTC) and Ethereum (ETH).
• The ruling will go into effect on July 1st, 2023 and requires Celsius to use commercially reasonable methods to maximize the value of their altcoins.
• This news follows a class action lawsuit that accused Celsius of operating as a Ponzi scheme and allegations from New York State Attorney General Letitia James that Alex Mashinsky, former CEO of Celsius, misled investors.
US Judge Grants Bankrupt Crypto Lender Celsius Greenlight To Convert Altcoins Into Bitcoin and Ethereum
A US judge is ruling that bankrupt crypto lender Celsius may convert its altcoin holdings into Bitcoin ( BTC ) and Ethereum ( ETH ) as a form of financial relief. In a new court document, Judge Martin Glenn of the Southern District of New York has ruled that starting on July 1st, the troubled crypto firm will be allowed to convert all non-BTC and non-ETH cryptocurrencies into the top two digital assets by market cap.
Celsius Must Use Commercially Reasonable Methods To Maximize Value Of Altcoins
Celsius must also use “commercially reasonable methods” to attempt to maximize the value of the altcoins they want to convert to BTC or ETH. Furthermore, the company must provide a monthly report on the amount of altcoins they convert to Bitcoin and Ethereum, according to the report.
Celsius Files For Bankruptcy After Native Asset Plunges Over 99%
Celsius originally filed for bankruptcy in July 2022 after its native asset plummeted by over 99% and it was unable to fulfill customer withdrawals. Soon afterward, the firm was hit with a class action lawsuit that alleged it was operated as a “literal” Ponzi scheme, naming many of its executives, including Alex Mashinsky, who at the time was the company’s CEO, as the perpetrators.
NYS Attorney General Alleges Former CEO Misled Investors
Early in 2023, New York State Attorney General Letitia James sued Mashinsky for allegedly making misleading statements to investors and failing to properly register as required by state law. According to James, the former chief executive told investors that he would only be making low-risk investments in reputable companies. However, he routinely loaned assets to high-risk counterparties. In May, Mashinsky responded, saying that James’ allegations were based on misinformation.
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