Celsius Altcoin Conversion Window Opened Under Court Order

A court-approved window allowing Celsius Network’s bankruptcy estates to sell or convert most non-bitcoin and non-ether crypto assets into bitcoin or ether opened on July 1, 2023. The authority came from a stipulation and order signed by U.S. Bankruptcy Judge Martin Glenn and entered on June 30 in the Southern District of New York.

The date marked an operational threshold, not proof that every permitted trade occurred on July 1. The order said the debtors “may” begin conversions on or after July 1 and required consultation with advisers to the official committee of unsecured creditors. The surviving court record does not provide an event-day execution report, trade list, price or volume.

What the order authorized

Docket No. 2943 defined the eligible assets broadly as non-BTC and non-ETH cryptocurrency, tokens or other crypto assets, while excluding tokens associated with Withhold or Custody accounts. Celsius could convert those assets to BTC or ETH from July 1 until before the effective date of a reorganization plan.

The order also imposed process conditions. Celsius was to use commercially reasonable efforts to maximize the value of assets sold or converted. It said the debtors intended, without conceding the legal status of any token, to rely on applicable exemptions from federal securities law, including Securities and Exchange Commission Rule 144 for tokens held more than one year. Required state “blue sky” filings were also contemplated.

Those provisions made the order narrower than a blanket liquidation command. It granted authority, identified excluded account categories and set compliance expectations. It did not classify any particular token as a security, direct a fixed conversion schedule or state how BTC and ETH would be divided.

Bankruptcy mechanics, not a creditor windfall

Celsius and certain affiliates had filed Chapter 11 petitions on July 13, 2022. By mid-2023, the debtors were preparing an amended plan that contemplated cryptocurrency distributions to creditors. The June 30 order said Celsius had been in regular dialogue with the SEC and certain state regulators about making those distributions consistent with applicable law.

The court’s choice of BTC and ETH therefore mattered institutionally. A failed crypto lender with a multi-token balance sheet was being permitted to consolidate assets around two cryptocurrencies while it tried to construct a legally workable distribution plan. Contemporaneous reporting connected the move to regulatory uncertainty surrounding other tokens, but the order itself did not declare BTC or ETH outside all securities laws and did not record SEC approval of the bankruptcy plan.

For creditors, conversion did not change the face of their claims. The order expressly said a sale or conversion would not alter any creditor’s claim against the debtors. Nor did conversion guarantee the amount, timing or form of recovery. Asset prices could move between conversion and distribution; trading could incur costs or affect realized value; and a proposed plan still required later procedural steps.

What July 1 did—and did not—establish

The verified development on July 1 was the opening of the authorized conversion period. It was consequential because it gave Celsius a court-supervised path to simplify a fragmented crypto portfolio ahead of a possible creditor distribution and documented how securities-law uncertainty was shaping bankruptcy administration.

No reliable primary record reviewed for this reconstruction shows which trades, if any, were executed on July 1, at what venues or prices, or in what quantities. Later wallet movements and the eventual bankruptcy outcome cannot be projected backward as event-day facts. The defensible conclusion is limited: Celsius could begin converting eligible altcoins into BTC or ETH on July 1 under the court’s conditions, while creditor recoveries and the reorganization remained unresolved.