Cryptocurrency investment platform Celsius announced Wednesday that it has filed for U.S. bankruptcy protection, a month after freezing withdrawals from its platform amid turmoil surrounding other similar services. In its press release, Celsius states that it is seeking to restructure itself so that “maximum value for all stakeholders,” and notes that $167 million in cash is available to meet urgent needs until then.
Without the withdrawal freeze decided on June 12.expediting them would allow some customers to act first to be fully reimbursed, leaving others to wait“Said the special committee of the board of directors of Celsius, quoting the press release. Filing for Chapter 11 in the United States, the option Celsius chose on Friday, allows a company that can no longer repay its debt to reorganize with protection from its creditors while continuing its current operations.
Other bankrupt companies
“It’s the right decision for our community and our company.– assured Alex Mashinsky, co-founder and head of Celsius. “I am sure that when we look back at the history of Celsius, we will see this moment as a decisive one, a moment when we (…) will consolidate the future of the company.“. Last week, cryptocurrency lending specialist Voyager Digital also filed for bankruptcy. Other companies have suspended withdrawals, such as CoinFlex and Babel Finance, due to insufficient liquidity. The Singaporean investment company Three Arrows Capital is in the process of liquidation.
These companies wanted to play in the banking field, lending money and rewarding deposits, but they are suffering from the sharp decline in cryptocurrencies in a market that is averse to risky bets. Before the suspension of withdrawals, Celsius Network offered interest rates of over 18% for savers and 0.1% for borrowers. Celsius was one of the biggest players in the industry. It said it had 1.7 million customers in June. Bitcoin has lost more than half its value since the start of the year and is currently trading at just over $20,000. It was worth about $69,000 at its peak in November 2021.
Source: Le Figaro
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