Celsius Crypto News: Network Reshuffles Legal Team Amid Bankruptcy Proceedings
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Celsius (CEL-USD) seems to succeed Classic Earth (LUNC-USD) as the new great controversy that is invading the market. The company’s strategic missteps, shady dealings, and alleged illegal activities come back to bite her. This week in Celsius crypto news, the company reorganizes its legal team as it begins bankruptcy proceedings.
Celsius has made a name for itself as a crypto trading, staking, and lending platform. But almost as quickly as it has become popular, it has fallen apart in the past five weeks. The start of the uproar was a shutdown of the withdrawal instituted by the company across its services; none of its 500,000 users have been able to withdraw their funds. This decision was strongly criticized by investors, who compared it to robinhood (NASDAQ:HOOD) even the stock market freeze early last year.
Adding fuel to the flames of controversy recently, some accusations of FiKey, a DeFi aggregator. KeyFi reportedly worked behind the scenes, investing Celsius’ assets for the company. The platform had been identified as a commercial partner of Celsius in the context of Arkham Intelligence Celsius report – one that accused Celsius of mismanaging investors’ funds through high-risk transactions.
The company is suing Celsius for refusing to honor a handshake agreement between the two regarding KeyFi’s compensation. But more important to investors are KeyFi’s claims that Celsius operates under a Ponzi scheme model.
Celsius Crypto News: Network Calls For New Lawyers
Today, Celsius crypto news sees the company stepping up its efforts to right its wayward ship. Most notable is the news of a legal team shakeup. But also, it looks like the company is taking steps to reduce its debt.
The company is recruiting a legal team from the law firm Kirkland & Ellis LLP to help him navigate a potential bankruptcy filing. This is not the first team for Celsius. Previously, he had hired consultants from the consulting firm Alvarez and Marsal and lawyers from Akin Gump Strauss Hauer & Feld.
What’s interesting about this choice of legal team is Kirkland & Ellis’ recent work with digital travel (OTCMKTS:VYGVF). The company fell into its own bankruptcy dilemma following massive exposure to the Terra Classic network. The company is helping Voyager manage debt ranging from $1 billion to $10 billion.
In an attempt to pre-empt this debt and minimize the damage, Celsius is said to have also repaid its debts to other DeFi platforms. Today she paid off a $20 million debt owed to the Aave (AAVE-USD) Platform. It’s a good start for a company that has a lot of repayments to make. Celsius owes around $215 million more to Aave and the Compound (COMP-USD) network.
As of the date of publication, Brenden Rearick had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.