"When people lose weight on the Atkins Diet, cholesterol goes down because the body switches from a sugar metabolism to a fat metabolism. As long as the person stays beneath their critical carbohydrate tolerance (the point at which the body no longer burns fat for fuel), cholesterol will not go up. The only way cholesterol will rise on the Atkins program is if the dieter goes back to eating excessive carbohydrates, which is not recommended on the Atkins program. When an Atkins dieter reaches their goal weight and is on the maintenance plan, if their carbohydrate tolerance level allows them to take in a lot of carbohydrates without going to excess, then we recommend cutting back on saturated fats, and incorporating more monounsaturated fats such as olive oil, avocado, seeds and nuts, into the diet."

"In short, a diet that controls carbohydrate consumption correctly, as the Atkins Diet does, is not dangerous, in fact it is probably very beneficial to the heart as it reduces risk factors. A controlled-carbohydrate diet allows your body to burn fat rather than store it, lowering cholesterol. It is the combination of fat and carbohydrates that is dangerous, not fat on its own."

Quoted here