The cryptocurrency lending platform Celsius Network LLC is apparently considering many options in order to “preserve and safeguard assets” in the wake of the mid-June turmoil.
“Across Celsius today, we are committed and working as rapidly as possible to stabilise liquidity and operations so that we can provide more information with the community,” the platform revealed in a blog post dated June 30.
According to the lender’s announcement, these prospective steps might include, among others, “pursuing strategic deals” and “restructuring its obligations.”
Additionally, Celsius noted in his post: These extensive investigations are difficult and time-consuming, but we want the community to know that our teams are comprised of specialists from a variety of fields.
Celsius generates rumours by delaying withdrawals
The idea that the Celsius platform had gone bankrupt was exacerbated by the company’s declaration on June 12 that it would restrict withdrawals and transfers in response to “extreme market circumstances.”
As a consequence of the revelation, 1.7 million clients were unable to redeem their assets, sparking concerns that cash may be frozen for a lengthy period.
According to information supplied by persons with knowledge of the issue who spoke to the Wall Street Journal last week, the corporation has allegedly hired restructuring experts from the consulting firm Alvarez & Marsal to study the possibility of declaring bankruptcy.
Moreover, according to investor documentation, Celsius was allegedly constructed with a significant degree of risk.
Celsius weighed down by the bitcoin market meltdown
At a time when the Bitcoin sector as a whole is collapsing, the lender is facing financial challenges. In May, the fall of Terraform Labs’ stablecoin TerraUSD (UST) and its native token LUNA led in a $40 billion loss due to a startling implosion.
This occurrence caused the cryptocurrency market to become volatile and led to hundreds of billions of dollars in losses throughout the entire cryptocurrency industry.
The United States Federal Reserve’s efforts to tackle sky-high inflation via a series of aggressive interest rate hikes have contributed to the issue. These rate increases have fueled a spate of risk-averse selling of digital assets, which has compounded the market decline.
Prior to the crash, Celsius’s fundraising efforts were very successful. In its most recent funding round, completed in November 2021, the firm raised a total of $750 million at a valuation slightly north of $3.25 billion.
As of May 2022, the business had more than $12 billion in assets under administration and had distributed more than $8 billion to consumers.
Also Read: El Salvador’s President Purchases More Bitcoin After Losing $60 Million
