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HomeBusinessCrypto lender Celsius Network files for bankruptcy and begins a financial restructuring

Crypto lender Celsius Network files for bankruptcy and begins a financial restructuring

New Jersey based cryptocurrency lender Celsius filed for bankruptcy late Wednesday night. “This is the right decision for our community and company,” said Alex Mashinsky, Co-Founder & CEO, Celsius in the company’s official statement released on https://www.businesswire.com/.

Celsius has $167 million in store to help during their financial restructuring process. The company also filed customary chapter 11 “first day motions” which will help continue business going forward. Celsius added in their statement that they are not asking for permission to permit consumer withdrawals at this time.

According to reports out of Calcalist and Coin Deck, Celsius laid off 150 employees in early July to help them financially. The crypto lender also announced new senior directors and advisors to help see them out of this current situation and specifically focus on the restructure that is set to take place.

On June 12, Celsius displayed the first signs that they were in trouble by blocking user accounts on its platform. In some cases, this resulted in customers losing their money since they were unable to pay off crypto loans on the site.

Cryptocurrency lenders have struggled in recent months due to a crash in crypto prices and the disintegration of TerraUSD in May. On July 1, Three Arrows Capital filed for bankruptcy and turned the crypto world upside down. Voyager Digital Ltd followed shortly thereafter filing for bankruptcy on July 6. Celsius becomes the latest big crypto company to file for bankruptcy in the past two weeks.

The Celsius token dropped over 30% shortly after its announcement of filing.

While their bankruptcy decision may not be reflecting well at the moment, Celsius believes that their move to file for bankruptcy will pay off in the long run. “I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company, ” said Mashinsky.



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