Celsius Files for Bankruptcy Protection

The crypto lending platform Celsius Network and some of its subsidiaries filed for bankruptcy in a New York court.

Moments ago, @CelsiusNetwork filed voluntary petitions for Chapter 11 protection and announced that the company initiated a financial restructuring. https://t.co/vf5wsT6TMp

— Celsius (@CelsiusNetwork) July 14, 2022

The filing was made under Chapter 11 of the United States Bankruptcy Code. The company hopes that the restructuring will maximise value for all stakeholders.

“Today’s petition follows Celsius’s difficult but necessary decision last month to suspend withdrawals, swaps and transfers on the platform, to stabilise its business and protect customers,” the company said.

Celsius said it has $167 million in cash to provide liquidity to support certain operations during the restructuring.

The company emphasised that since the filing, most platform operations have been paused, but it will continue to operate.

On 13 July, Celsius repaid the loan in the DeFi protocol MakerDAO and withdrew a total of 23,962 WBTC collateral worth about $490 million.

Lawyers described the company’s almost inevitable bankruptcy, and the Vermont Department of Financial Regulation said of its extreme insolvency. It was reported that existing investors in the platform agreed to restructuring, but would refrain from new investments in the project.

Prior to Celsius, bankruptcy petitions were also filed by the hedge fund Three Arrows Capital and the cryptocurrency broker Voyager Digital.

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