In a recent development, Celsius Network, a defunct crypto lender, has filed a request for court approval to convert all altcoin holdings to Bitcoin and Ethereum. This move was announced as part of the updated reorganization plan filed on June 14 in the Southern District Court of New York, where Celsius is undergoing bankruptcy proceedings.
Converting Altcoins to Maximize Value
Celsius Network plans to initiate the conversion of all altcoins not designated for Withhold or Custody accounts starting from July 1, if approved by the bankruptcy court. The company aims to maximize the value of these altcoins and will make “commercially reasonable efforts” during the conversion process, as mentioned in the filing.
Objections and Hearing
Any parties opposing the plan are required to submit written objections to the court electronically. These objections will be considered during the hearing scheduled for June 28. To have their claims assessed by the court, opposing parties must submit their objections by June 26 and appear in court for the hearing.
The Celsius Network Official Committee of Unsecured Creditors has already given its approval to the proposed plan.
Concerns of Borrowers
However, borrowers who have collateral locked up in the defunct firm are expressing concerns about potential losses due to the new plan. The plan includes a provision called “Set off,” which allows Celsius to negate the collateral owed to borrowers.
David Adler, a partner at McCarter & English, LLP, representing a group of Celsius borrowers, opposes the plan and believes it violates consumer lending laws. Adler intends to challenge the plan in court on behalf of his clients.
Adler also questions the extension of exclusivity requested by Celsius, stating that there has been no communication from the Debtors to the Borrower Group for the past six to seven weeks, resulting in a state of “total radio silence.”
In conclusion, Celsius Network’s request for court approval to convert altcoins to Bitcoin and Ethereum has garnered attention and raised concerns among borrowers. The outcome of the hearing on June 28 will determine the fate of Celsius Network’s reorganization plan and its impact on the cryptocurrency industry.
1. What is Celsius Network? Celsius Network is a defunct crypto lender that previously offered lending and borrowing services in the cryptocurrency space.
2. Why does Celsius Network want to convert altcoins to Bitcoin and Ethereum? Celsius Network aims to convert altcoins to Bitcoin and Ethereum to maximize their value during bankruptcy proceedings.
3. When will Celsius Network begin the conversion process? If the plan is approved by the court, Celsius Network will start converting altcoins on July 1.
4. What is the “Set off” treatment mentioned in the article? The “Set off” treatment allows Celsius Network to negate the collateral owed to borrowers, potentially leading to losses for the borrowers.
5. What objections can be raised against Celsius Network’s reorganization plan? Opposing parties can raise objections regarding the conversion of altcoins, the “Set off” treatment, and any potential violations of consumer lending laws.