Celsius to Prepare Bankruptcy Filing After Freezing Accounts

Celsius, a cryptocurrency lending company, is preparing to file for bankruptcy after hiring restructuring advisers from the firm Alvarez & Marsal, according to a Friday Wall Street Journal report. 

This report comes less than two weeks after Celsius paused all withdrawals, Swaps and transfers between accounts citing “extreme market conditions.” They followed that announcement up with an update a week later saying they were continuing the halt on activities in an effort to stabilize their liquidity and operations. 

“We want our community to know that our objective continues to be stabilizing our liquidity and operations,” the update said. “This process will take time.”

Prior to halting capabilities on their platform, Celsius’ CEO Alex Mashinsky dismissed rumors of insolvency as “FUD” meaning “fear, uncertainty and doubt.” Mashinsky was wrong in his assessment and a few days later posted on twitter asking the Celsius community for patience and support. 

“@CelsiusNetwork team is working non-stop,” the tweet read. “We’re focused on your concerns and thankful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.”

Mashinsky has not tweeted since. 

This is just the latest report in a string of crypto firms struggling to stay afloat. Hedge fund manager, Three Arrows Capital is tangled in insolvency problems after incurring $400 million in liquidations from crypto lending firms. In addition, Voyager Digital just accepted two lines of credit from Alameda Ventures. Since then they have limited daily withdrawals to $10,000.

Author: Tyler Irvin

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