Bankrupt crypto lending firm Celsius Network which is currently under United States Bankruptcy Court proceedings (Chapter 11) has filed for permission to sell off its stablecoin holdings.
The distraught crypto lender wishes to do this to secure funds through liquidity to carry out its operations. At present, Celsius Network has about 11 stablecoins in its possession worth approximately $23 million.
This sale which Celsius Network is requesting permission involves both its current and future stablecoins. While the Southern District court is considering the filing, the hearing which will be held remotely has been scheduled to hold on October 6th.
Peradventure the motion gets approved, Celsius Network will engage the proceeds to settle the cost of its operation. The chief U.S. bankruptcy judge, Martin Glenn is the presiding authority over the bankruptcy process.
Later, a different process will be designed to pay back Celsius Network because the proceeds from the sales are from a portion of its estate.
According to the court filing, “The Debtors, however, continue to own stablecoins that should be monetized to fund their operations in these Chapter 11 cases given their market stability compared to other types of cryptocurrencies.”
Bankrupt Celsius Network Journey
The crypto lender’s swoop into bankruptcy ensued in Mid-June when it halted withdrawals on its platform.
According to Celsius Network, this happened on the premise of a prevalent extreme market condition. In addition to the halt on withdrawal, it equally suspended its swap and transfer products. Correspondingly, regulators in many U.S states including Vermont started investigating the lender claiming that it was highly insolvent.
Under those circumstances, Celsius filed for Chapter 11 bankruptcy and became bankrupt. Precisely, with the U.S. Bankruptcy Court of the Southern District of New York like troubled 3AC.
This was to provide the lender with enough support to undergo its restructuring process without hitch.
After liquidating all its assets, Celsius declared that it had $167 million in liquidated cash. Ever since then, it has been a rough ride for the company, Many others who were in similar situations like the crypto lender opted for layoffs to help them gain stability in this bearish season.