The Crypto Crash Drives Celsius Network Into Bankruptcy


The world’s largest crypto lender, Celsius Network, has filed for Chapter 11 bankruptcy protection, following a spate of crypto asset businesses that have reorganised this year in reaction to a major sell-off in cryptocurrency.

The announcement marks the latest high-profile crypto bankruptcy as crypto values plummet, making Celsius the latest victim of a $2 trillion meltdown that has crippled some of the sector’s most popular companies and caused hundreds of thousands of individual investors to suffer significant financial losses.

In a statement issued on Thursday, Celsius said that it would aim to continue its company via a restructuring that “maximises value for all stakeholders.” The bitcoin lender located in New Jersey has accessible liquidity of $167 million, which will fund some activities throughout the restructuring process.

According to a court filing in the U.S. Bankruptcy Court for the Southern District of New York, Celsius assessed its assets and liabilities to be between $1 billion and $10 billion on a consolidated basis. Celsius has almost one hundred thousand debtors.

In the United States, Chapter 11 permits insolvent businesses to reorganise while maintaining operations. Which cryptocurrency casino is the best in July 2022? Read our detailed comparison! We made deposits, played at, and evaluated more than eighty crypto casinos in order to identify the best.

As the value of cryptocurrencies plunged this year, creditors providing high-yield crypto loans suffered liquidity crises and customer repayments, placing them in a precarious financial position.

Some responded by restricting customer withdrawals, acquiring money at lower prices, and commencing restructuring procedures.

The $20 Billion Assets of Celsius and Client Panic Flight

Before it banned all withdrawals last month, Celsius had amassed over $20 billion in assets by offering depositors interest rates of up to 18 percent. This was done in reaction to a mass exodus of customers.

In a news statement, a special committee of Celsius’s board of directors said that Thursday’s filing follows a “difficult but necessary decision” taken by the firm in June to prohibit withdrawals, swaps, and transfers on its platform in order to preserve business stability and protect clients.

This month, crypto broker Voyager Digital filed for Chapter 11 bankruptcy protection, while crypto hedge fund Three Arrows Capital has called in liquidators.

Some organisations, such CoinFlex and Babel Finance, have restricted withdrawals due to a shortage of liquidity, while others have avoided bankruptcy by taking emergency money at rates well below market value.

Also Read: Bitcoin recovers when the United States declares its worst inflation in 41 years

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