Celsius Network, a bankrupt cryptocurrency lending company, has announced a drastic move to convert all altcoins held by its customers into Bitcoin (BTC) and Ethereum (ETH). This conversion process is scheduled to begin on July 1, 2023.

On June 15, 2023, Celsius has applied to the court to convert all altcoins held by its customers into Bitcoin and Ethereum. The total value of altcoin holdings in the Celsius Network is estimated at around US$ 215 million, with the composition including Celsius (CEL0 worth US$ 70 million, Polygon (MATIC) worth US$ 52 million, Cardano (ADA) worth US$ 26 million, Chainlink (LINK) worth US $17 million, and Litecoin (LTC) worth US$14 million and several other tokens.

Additionally, this action is also part of the reorganization plan announced by Celsius on June 15. In this plan, claims submitted by retail borrowers will be handled through settlement using the set off treatment method.

Set off treatment refers to a process in which losses or liabilities owned by party A can be offset by profits or credits owned by party B. By implementing this method, companies hope to effectively manage retail borrowers' claims and reorganize their assets to strengthen company position.

Harsh Criticism From Customers and Lawyers

Celsius' proposed reorganization plan has received criticism from various parties, including customers and even its own lawyers.

David Adler, bankruptcy partner at McCarter & English, revealed that Celsius Network's proposed reorganization plan allegedly violates consumer lending laws at the state and federal level.

Then, Adler also highlighted the lack of communication between Celsius Network and the borrowing parties during a period of six to seven weeks.

“This proposed treatment violates every consumer lending law out there,” Adler said in a tweet.

Adler emphasized the need for more effective communication and greater transparency in safeguarding the interests of the parties involved, so that decisions taken can be more reliable and receive wider support.