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Celsius Network Files for Chapter 11 Bankruptcy
The crypto lender said it has $167 million in cash on hand and will continue to freeze customer withdrawals.
Updated May 11, 2023, 5:42 p.m. Published Jul 14, 2022, 2:44 a.m.
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Celsius Network, the crypto lender that is facing a liquidity crisis, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, the company said in a statement issued late Wednesday.
- “Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps and transfers on its platform to stabilize its business and protect its customers. Without a pause, the acceleration of withdrawals would have allowed certain customers – those who were first to act – to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery," the statement read.
- “This is the right decision for our community and company,” said Alex Mashinsky, Celsius' co-founder and CEO. “We have a strong and experienced team in place to lead Celsius through this process. 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.”
Read More: Celsius Pays Off Last DeFi Loan, Reclaims Nearly $200M of Wrapped Bitcoin From Compound
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- Celsius is one of the crypto lenders facing financial troubles in the latest liquidity crisis in crypto. It suspended withdrawals starting June 12, cut jobs and hired restructuring experts.
- The lender says it has $167 million in cash on hand, enough to "support certain operations during the restructuring process."
- The company has filed motions with the court to allow it to continue operating "in the normal course," so that it can pay employees and continue benefits.
- Celsius isn't requesting authority to allow customer withdrawals at this time, it said. Customer claims will be addressed through the Chapter 11 process.
- Kirkland & Ellis LLP is serving as legal counsel, Centerview Partners is serving as financial adviser, and Alvarez & Marsal is serving as the restructuring adviser.
- More information on the case can be found here.
Read More: Looking at the Claims Celsius Operated Like a Ponzi
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