Celsius has filed for bankruptcy
- July 14, 2022
- 0
Crypto lending platform Celsius Network and some of its subsidiaries have filed for bankruptcy in New York court. just now, @CelsiusNetwork He filed voluntary petitions for Chapter 11
Crypto lending platform Celsius Network and some of its subsidiaries have filed for bankruptcy in New York court.
just now, @CelsiusNetwork He filed voluntary petitions for Chapter 11 protection and announced that the company was embarking on a financial restructuring. https://t.co/vf5wsT6TMp
— Celsius (@CelsiusNetwork) 14 July 2022
Filing under Section 11 of the United States Bankruptcy Code. The company hopes the restructuring will “maximize value for all stakeholders.”
“Today’s petition follows Celsius’ difficult but necessary decision last month to suspend withdrawals, clearing and transfers on the platform to stabilize its business and protect customers,” the company said.
Celsius said it has $167 million in cash to provide liquidity to support certain operations in the restructuring process.
The company stressed that most of the transactions on the platform have been suspended since the application was made, but will continue to work.
On July 13, Celsius repaid the last major DeFi loan in Compound protocol, releasing just under $200 million in WBTC and more than 400,000 stETH collateral by pulling out the loan on Aave protocol the day before.
Recall that on June 13, the platform suspended withdrawals, clearing and transfers between accounts. Then the company explained this with “extreme market conditions”, but analysts suggested that the real reason for what happened was a “liquidity crisis”.
On July 7, Celsius fully repaid the loan in the MakerDAO DeFi protocol and withdrew a total of 23,962 WBTC collateral worth approximately $490 million.
Lawyers called the company’s bankruptcy almost inevitable, and the Vermont Department of Financial Regulation announced its “extreme bankruptcy.” It is reported that the existing investors of the platform have accepted the restructuring but will refrain from making new investments in the project.
Before Celsius, hedge fund Three Arrows Capital and cryptocurrency broker Voyager Digital also filed for bankruptcy.
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