The Celsius cryptocurrency platform, which caused a sharp drop in these assets in June, filed for bankruptcy protection under the so-called Chapter 11 (which protects it from creditors) before the New York court.
In June, Celsius froze its clients’ asset withdrawals, arguing that “extreme” market conditions had left some investors unable to withdraw their money.
moments ago, @CelsiusNetwork filed voluntary petitions for Chapter 11 protection and announced that the company began a financial restructuring. https://t.co/vf5wsT6TMp
—Celsius (@CelsiusNetwork) July 14, 2022
Now, in the court case, Celsius estimates a total of 100,000 creditors, with estimated assets and liabilities between 1 billion and 10 billion. But he says that he has 167 million in liquidity on his hands, advances Reuters. According to the Washington Post, Celsius was estimated to have 500,000 depositors. Among the unsecured creditors are a Cayman Islands-based investment firm, to which he owes nearly $300 million, a digital marketing company to which he owes more than $13 million, and an online brokerage firm to which he owes more than $300 million. who owes him $12 million, 7 million.
Celsius’s assets, as reported when it froze trading, had risen from $11.8 billion in May to $15 billion in October.
Another black day in the world of cryptocurrencies. Celsius Platform Suspends Bitcoin Withdrawals and Sinks
In a statement, Celsius explains that it has gone to court to protect itself from creditors to “have the opportunity to stabilize its business and consummate a comprehensive restructuring that maximizes value for all stakeholders.” The company says that the 167 million gives it liquidity to support some operations during the restructuring process.
Alex Mashinsky, founder of Celsius, commented that “this is the right decision for the community and for the company”.
In June, the cryptocurrency crash, made worse by the Terra/Luna crash, caused many investors to start withdrawing funds from cryptocurrency platforms, further widening the gap. Celsius ended up freezing withdrawals in June, dragging, in turn, an investment fund Three Arrow Capital, which has also submitted the application for controlled bankruptcy. More recently, Voyager Digital also filed for bankruptcy, having faced a surge in bailouts after what happened to Celsius.
Winter is coming. Cryptocurrencies in a new litmus test
Source: Observadora
