• A US judge has granted bankrupt crypto lender Celsius permission to convert its altcoin holdings into Bitcoin and Ethereum.
• The ruling allows the firm to start converting non-BTC and non-ETH cryptocurrencies on July 1st, 2023.
• The move follows a class action lawsuit alleging that Celsius was operating as a “literal” Ponzi scheme and a separate lawsuit by New York State Attorney General Letitia James against former CEO Alex Mashinsky.
Judge Grants Bankrupt Crypto Lender Celsius Greenlight To Convert Altcoins
A US judge is allowing bankrupt crypto lender Celsius to convert its altcoin holdings into Bitcoin (BTC) and Ethereum (ETH). Judge Martin Glenn of the Southern District of New York 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 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 Plummets 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 perpetrators.
New York State AG Sues Former CEO For Misleading Statements To 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, former chief executive told investors that he would only be making low-risk investments in reputable companies but routinely loaned assets out at high risk instead . In May , Mashinsky responded saying James’ allegations were based on misinformation .
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