Celsius, which went bankrupt after the collapse of Terra in 2022, announced that it would convert its altcoins as part of its restructuring plan.
Celsius plans to convert its altcoins
The company had approximately $4.2 billion in reserves in various cryptocurrencies as of July 2022. $23 million of that was in stablecoins. US bankruptcy chief judge Martin Glenn stepped in in January to reimburse customers.
According to the latest announcement, Celsius plans to convert its altcoins into Bitcoin and Ethereum as part of its restructuring plan. In the official statement, “Celsius will sell all altcoins of its customers (except Custody and Withholding accounts) starting July 1. It will convert them into Bitcoin and Ethereum,” he said.
Celsius will be selling all altcoins from all customers (except Custody and Withhold accounts) starting July 1st and will be converting them into Bitcoin and Ethereum.
— Celsians (@CelsiansNetwork) June 15, 2023
Reports in 2023 showed that the company owns the following altcoins alongside BTC, ETH and stablecoins:
- Bancor (BNT)
- Celsius (CEL)
- Lido Staked Ethereum (stETH)
Will creditors get their money back?
The restructuring plan, which emerged today, offers creditors a set-off method for repayment. The term “offset” refers to taking into account losses in a given year, compared to profits. Losses that cannot be deducted from income are compensated by deducting them from profits in the following years. A Twitter user explains the method in question as follows:
In your example, the customer took a $25,000 secured loan with 2 BTC — let’s say the customer repaid 20% and therefore has $20,000 outstanding in principal. If the offset counts BTC at 7/13/22 prices, the value of the collateral would be approximately $40,000. Subtract the $20,000 principal from the $40,000 collateral and convert the remaining $20,000 into an Eligibility claim. Assuming that the Earn program reclaims maybe 30% in liquid crypto + stock, in this scenario you’re only looking at repurchasing $6,000 in liquid crypto plus whatever the stock return is.
In your example, the customer took a $25k loan secured by 2 #BTC — let’s say the customer has paid 20% back and thus has $20k outstanding principal.
If the set-off counts the BTC at 7/13/22 prices, the collateral would be valued at about $40k.
Subtract the $20k principal from… pic.twitter.com/ZCKC1xYegm
— Cam Crews (@camcrews) June 10, 2023
When will sales start?
According to Celsius’ restructuring plan, it will sell all customers’ altcoins except Custody and Withholding accounts. According to the announcement, this process will begin on July 1, 2023. The revenue will be converted to Bitcoin and Ethereum, in particular.
The latest development comes after Celsius, which went bankrupt in 2022, announced that it had decided to transfer its assets to its creditors. However, McCarter & English’s Bankruptcy Partner, David Adler, stated that a segment of debtors he represents in the case may oppose this plan. Meanwhile, Celsius is expected not to return the deposits.
As we quoted as Kriptokoin.com, a federal judge ruled in favor of Celsuis in January 2023 in terms of client funds. Also, that same month, they filed a lawsuit against Celsius co-founder and former CEO Alex Mashinsky. The judge specifically argues that he used ‘false and misleading statements to promote’.
43545
