Tuesday, November 29, 2022
HomeCryptoThe Celsius cryptocurrency platform in turn declares bankruptcy

The Celsius cryptocurrency platform in turn declares bankruptcy

A month ago, Celsius froze withdrawals on its platform, in the wake of other similar services in turmoil.

Cryptocurrency investment platform Celsius announced on Wednesday that it had filed for US bankruptcy protection, a month after freezing withdrawals on its platform, in the wake of other similar services in turmoil.

In its statement, Celsius said it was looking to restructure itself to “maximize value for all stakeholders”, and said it had $167 million in cash available to meet urgent needs until then.

Without the withdrawal freeze decided on June 12, “their acceleration would have allowed some customers – the first to act – to be fully reimbursed, leaving the others behind to wait”, said the special committee of the board of directors of Celsius. , quoted in the press release.

“A good decision”

In the United States, recourse to Chapter 11, the option chosen by Celsius on Friday, allows a company that can no longer repay its debt to restructure itself safe from its creditors, while continuing its current operations.

“This is the right decision for our community and our business,” said Alex Mashinsky, co-founder and CEO of Celsius. “I am sure that when we look back on the history of Celsius, we will see this moment as crucial, a moment when we have (…) consolidated 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. Singaporean investment firm Three Arrows Capital is in liquidation.

1.7 million customers

These companies wanted to play on the banking field by lending money and remunerating deposits, but they are suffering from the sharp drop in cryptocurrencies in a market that is not inclined to risky bets.

Before suspending withdrawals, Celsius Network offered interest rates over 18% for savers, but 0.1% for borrowers.

Celsius was one of the biggest players in the industry. He said he 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 just above $20,000. It was worth nearly $69,000 at its peak in November 2021.

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