Celsius receives court’s nod, allows debtors to swap their altcoins with Bitcoin and Ethereum
|- Celsius, which declared bankruptcy in July last year, is looking to make its debtors whole again.
- The bankruptcy court allowed the use of BTC and ETH as cryptocurrencies to swap their altcoin with.
- While Celsius is bouncing back, the company it went bankrupt after - Three Arrows Capital - is still struggling to reclaim $1.3B from its co-founders.
The crypto market has noted a huge amount of loss this year, but the warning signs came in mid-2022 when Celsius, among others, went bankrupt.
Led by the now-bankrupt cryptocurrency hedge fund Three Arrows Capital, the company’s downfall marked the first contagion the crypto market experienced in a long time. However, by the looks of it, Celsius debtors might be getting an opportunity to miraculously recoup their losses.
Celsius debtors get a chance to recover losses
Celsius debtors, as per a bankrupt court’s order on June 30, can begin to cash the altcoins sitting in their wallets for Bitcoin and Ethereum. Starting July 1, these users will get the opportunity to claim back their assets but only by swapping them for two of the biggest cryptocurrencies in the world.
The move came after the New York bankruptcy court passed the motion Celsius had been fighting for a long time. The company has been holding regular talks with the Securities and Exchange Commission (SEC) to ascertain that the process is legitimate.
Celsius debtors becoming whole would send out an important message to users impacted by the recent spree of bankruptcies in the crypto industry.
Another significant example is FTX which, despite owing its debtors $8 billion, is also exploring ways to make them whole again. One option might be to make them stakeholders in the FTX exchange post its relaunch.
This, however, may not be true for some others in a similar situation. Three Arrows Capital (3AC) liquidators Teneo are claiming $1.3 billion from the founders of the hedge fund.
According to a report from Bloomberg, the liquidator claimed this amount from Su Zhu and Kyle Davies, citing the collapse of the fund and the losses it incurred during this period.
Even though more than $65 million worth of cash and assets have been secured by the liquidators as of today, they still have a long way to go, as the company’s balance sheet represents a $3.5 billion hole.
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