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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.
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
STORY CONTINUES BELOW
- 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
Greg Ahlstrand
Originally from California, I've been Asia-based since 1999, headquartered in Hong Kong and Jakarta and traveling throughout the Asean countries, Japan, Korea, the Chinese mainland and Taiwan for stories. Made Australia a couple of times, too. I started my journalism career as a news assistant at the Fresno Bee in Central California while studying the subject in school after the Navy. I went from launching and recovering helicopters on flight decks at sea to recovering papers fresh off the printer in the Bee's basement and launching them onto the editors' desks, whose editors had long since gone home for the night. Eventually, they let me stop delivering the paper and start writing stuff in it. My first beat was night cops: liquor store robberies, gang shootings, fatal car crashes (almost always alcohol related). It was an education. I am, as implied above, a U.S. Navy veteran. I served in seagoing helicopter squadrons as an aviation anti-submarine warfare technician throughout the Asia Pacific region and the Indian Ocean. I have a significant number of sailor stories to tell. I have no significant crypto holdings. Among my hobbies are welding, building stuff, home remodelling, (or knocking a house down and starting from scratch if it's too far gone to fix), riding horses and rebuilding old tractors. So far I've done a Ford 8N and a Ford 9N. It's slow going, because I live in Hong Kong and the tractors are in California, so I only get to work on them once or twice a year, for a week or two at a time - and that was before covid. I love my Lab, Cooper, whom my neighbors asked me to adopt two years ago when they moved back to Shanghai from Hong Kong. Cooper and I actually planned the whole thing -- we've known each other almost his whole life -- but his first parents are unaware of the conspiracy; and they send him Christmas presents every year.
