Another crypto lender, Celsius Network, has requested U.S. bankruptcy protection. “Customer complaints will be resolved through the Chapter 11 process,” the company said. Two other crypto companies have recently filed for bankruptcy protection: Voyager Digital and Three Arrows Capital (3AC).
Celsius Follows Voyager, Chapter 11 Bankruptcy Filing
Cryptocurrency Lending Network C announced Wednesday that it has “filed a voluntary application for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.” .”
Alex Mashinsky, CEO and co-founder of Celsius, commented:
This is the right decision for our community and company.
The company claims that the bankruptcy filing is intended to “provide the company an opportunity to stabilize its business and complete a comprehensive restructuring that maximizes value for all stakeholders.” .
Noting that it will continue to operate, the company explained: “Celsius has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring. “
Last month, Celsius halted withdrawals, swaps and transfers on its platform. Its decision to freeze its accounts prompted the US Securities and Exchange Commission (SEC) and several state regulators to probe company.
According to Wednesday’s announcement:
Celsius does not require any authority to allow customers to withdraw funds at this time. Customer complaints will be resolved through the Chapter 11 process.
State regulators believe degrees Celsius are ‘profound’
The US State of Vermont’s Financial Conduct Authority is one of the state regulators investigating the degree Celsius. The regulator asserts that the crypto company has participated in a securities offering that has not yet been issued. registered in many jurisdictions, including Vermont.
“Due to not registering an interest rate account as a security, Celsius customers did not receive material disclosures regarding their financial condition, investment performance, risk factors, and potential repayments. its services to depositors and other creditors,” the regulator detailed, adding:
The Department believes Celsius has been insolvent and lacks the assets and liquidity to meet its obligations to account holders and other creditors.
Last week, crypto lender Voyager Digital also filed for Chapter 11 bankruptcy. The company cited “persistent and contagion volatility in the crypto market” and the failure of crypto hedge fund Three Arrows Capital (3AC) on a loan as reasons for its decision to file. bankruptcy protection application.
What do you think about C filing for Chapter 11 bankruptcy? Let us know in the comments section below.
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