Will Celsius Network declare bankruptcy? Know the Full Story – Coinpedia – Fintech & Cryptocurreny News Media

According to the latest Wall Street Journal report, struggling crypto funding service Celsius Network may be considering filing for bankruptcy after hiring structural advisers from consulting firm Alvarez & Marsal.

Celsius Network unexpectedly banned customer withdrawals, trades and exchanges in early June, claiming the current market crash was the reason.

From this moment, the site did not give its consumers any details related to the restoration of its services. Meanwhile, on June 15, its CEO, Alex Mashinsky, posted an unclear remark that its staff were “working 24/7”.

According to easily searchable data, Celsius is now seeking new funding from investors. However, judging by the scenario, the lending site is discussing the possibility of declaring bankruptcy.

The terms state that if Celsius declares bankruptcy, goes into liquidation, and otherwise hesitates to service its debts, any eligible digital asset used as collateral under the loan program may not not be recovered and there may be no claim or effective interest in Celsius.

Celsius had around 1.5 million members at its peak, promising up to 18% consumer fund profits. As of May 2022, the company said it has over $12 billion in assets under management.

SEC commissioner not in favor of bailouts

Celsius was not the only cryptocurrency lender to struggle with liquidity. Several other organizations, such as Voyager, BlockFi, and Three Arrow Capitals, have reportedly encountered volatility issues. This was seen due to the recent crash in the crypto market, sparking speculation of a bailout.

During the last interview, SEC Commissioner Hester Peirce said that she was not in favor of bailouts for cryptocurrency companies. “Bailouts for failing companies,” according to Binance CEO Changpeng Zhao, don’t sound good.

Eventually, amid the ongoing stress, Sam Bankman-Fried-led offered financial assistance to several of these businesses.

Was this writing helpful to you?

Comments are closed.