The Celsius Network has recently disclosed plans in a court filing to convert all altcoin deposits into Bitcoin and Ethereum, sparking a multitude of reactions from their users. The action, which is slated to begin from July 1, 2023, is part of the network's broader strategic plan following its bankruptcy.
Celsius Network, known for its crypto-lending and borrowing services, faced bankruptcy and has since been working on a plan for reorganization. As part of this plan, the network aims to enhance accessibility to the dominant cryptocurrencies Bitcoin and Ethereum, leading to the decision to convert all altcoins into these two currencies.
A Bitter Pill to Swallow
For the Celsius Network's user base, this news is bittersweet. On the one hand, it's an opportunity for customers to receive back some of their original deposits. However, it means further downside for coins that Celsius users wanted to hold as they're sold off for Bitcoin and Ethereum.
The court filing disclosed on June 14 stated explicitly that the conversion would exclude tokens secured in Withhold or Custody accounts. The network aims to optimize the value of this currency conversion to maximize the potential financial benefits.
Impact on Creditors
The court documents have assured that this altcoin conversion will not negatively impact pending creditor claims. The debtors are committed to doing everything within their power to optimize the currency conversion's value, promising to distribute the ultimate payouts to creditors primarily in the form of Bitcoin and Ethereum, barring exceptions in specific circumstances.
A Look at the Numbers
As of April, the Celsius Network's balances included 91,630,000 MATIC tokens, valued at approximately $92.4 million, and 145,000 SOL tokens, worth around $3.4 million. The network also held 458 ETH tokens, equating to a staggering $873 million.
The forthcoming conversion could potentially affect these balances significantly. However, the exact changes will depend on the market prices of Bitcoin, Ethereum, and the respective altcoins at the time of conversion.
The Road to Recovery
The decision to convert altcoin deposits forms part of a wider recovery strategy for the beleaguered network. The Fahrenheit deal, a vital component of the Celsius Network's plan for reorganization, is integral to this strategy. While this move may not be universally popular, the hope is that it will mark a significant step towards financial recovery and renewed stability for the network.