The United States Bankruptcy Court for the Southern District of New York has approved a plan by bankrupt crypto-lender Celsius Network to convert its altcoins to Bitcoin (BTC) and ether (ETH).

The order was released judge Martin Glenn and the liquidation will pave the way for the distribution of funds to creditors in the near future.

The proposal was officially approved after discussions between Celsio and the US Securities and Exchange Commission (SEC). According to the decision of the bankruptcy judge, the problem creditor is entitled to:

“Beginning July 1, 2023, sell or transfer any cryptocurrency assets, excluding tokens associated with hold or escrow accounts, to BTC or ETH.”

Celsius, which faced bankruptcy in 2022 after the collapse of the Terra ecosystem and its Terra (LUNA) and TerraUSD (UST) tokens, left lenders waiting for resolution. Despite the bankruptcy filing months ago, the recent verdict brought new possibilities and extended the proceedings.

Amid the recent SEC crackdown on altcoins, which the regulator classified as securities, many crypto companies are choosing to convert altcoins to BTC and ETH. Notable Altcoins designated as SEC securities include Cardano (ADA), Solana (SALT) and Polygon (MAT).

Despite ongoing bankruptcy proceedings, Celsius was recently purchased by Fahrenheit crypto consortium in May 2023. The network now operates under the management of its new owners.

Related: Celsius lenders say Wintermute facilitated ‘wash trading’ — Report

The new owners have announced their intention to develop a revised bankruptcy plan. Although the specific details of these plans have not yet been released, it is now clear that the owners will distribute the assets exclusively in Bitcoin and Ether.

After the collapse of the Celsius Network, companies such as Voyager Digital and FTX faced financial problemsleading them to explore unique strategies to deal with lenders’ repayment demands.

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