Embattled crypto lender Celsius files for bankruptcy: report

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According to a new report, troubled crypto lender Celsius Networks has filed for Chapter 11 bankruptcy.

The Wall Street Journal reported Wednesday evening that the New Jersey-based company had filed for bankruptcy. Earlier, CNBC reported that the company was in the process of notifying state regulators of its impending filing.

Celsius and its representatives did not immediately respond to a request for confirmation or comment from MarketWatch.

Celsius froze all user withdrawals and transfers about a month ago, citing “extreme market conditions” as the crypto market plunged. The company said at the time that bankruptcy was an option and that it was also considering restructuring its debts.

A number of other crypto lending platforms followed suit in freezing withdrawals due to the crypto crash, including Babel Finance and CoinFlex, while digital asset broker Voyager filed for Chapter 11 in New York this week. last, and crypto hedge fund Three Arrows Capital filed for bankruptcy and was ordered into liquidation in recent weeks.

Read also : Is your crypto on Celsius or Voyager? Factors that determine if you can get your money back

Later in June, Celsius said its “continued goal of stabilizing our liquidity and operations”, which “would take time”.

Earlier this month, the firm’s former head of key investment strategy sued, claiming Celsius was operating as a ‘Ponzi scheme’ and using investors’ deposits to cover liabilities massive.

“Celsius grossly mismanaged client funds, failed to perform basic internal auditing to account for its obligations, and manipulated crypto-assets for the benefit of itself and its principals,” said Celsius. alleged the lawsuit.

On Sundayreports the Wall Street Journal Celsius had hired new lawyers for restructuring advice, including a potential bankruptcy option.

The company reported $11.8 billion in assets in May, with around 1.7 million users.

Cryptocurrency prices have fallen this year, with bitcoin BTCUSD,
+3.35%
around 50% reduction in the past three months – and down 57% since the start of the year – while ethereum ETHUSD,
+3.56%
is down 63% in the last three months, and 70% in 2022.

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