The Celsius Network filed for bankruptcy protection less than a day after Vermont’s Department of Financial Regulation (DFR) reported that the embattled crypto lender was “deeply insolvent.”
Celsius Files for Bankruptcy Protection
A month after freezing customer assets at the peak of the crypto crash, one of the biggest crypto lenders, Celsius, has started filing for Chapter 11 bankruptcy protection.
In a statement issued on Wednesday, Celsius said the decision to file for bankruptcy was “necessary” to provide the crypto company with an “opportunity to stabilize its business.”
According to Alex Mashinsky, co-founder and chief executive of Celsius, the company has $167 million in cash on hand to support operations in the meantime.
Celsius Completes DAI Loan Repayment
The filing for bankruptcy was made when Celsius paid off its last major outstanding debt of $50 million to DAI.
In return, Celsius received its collateral for the loan: almost $200 million worth of wrapped Bitcoin, or WBTC.
Celsius Falls 50% Under Pressure
The announcement merely confirmed the suspicion of traders, who proceeded to dump the Celsius token, CEL. The sell-off saw the price of CEL crash as much as 50%, dropping from a high of $0.9549 to as low as $0.4239.
The 24-hour price chart of Celsius (CEL). Source: CoinMarketCap
CEL now trades at $0.6599 and is ranked as the 148th largest crypto, as its market cap slipped to $153.8 million.
On the Flipside
- On Thursday, the Celsius team was sued for manipulation and improper risk management by former investment manager Jason Stone, mounting increasing pressure on the firm.
Why You Should Care
Through the bankruptcy filing, Celsius hopes to restructure its business in a way “that maximizes value for all stakeholders.”
Get all the info about the withdrawal pause by Celsius in:
Read about the Celsius lawsuit in:
The Celsius Debt repayment is covered below: