Crypto lending firm Celsius Network has filed for chapter 11 of the Southern District of New York Bankruptcy court. According to a press release, the filing was initiated to ensure that the company has the necessary support to restructure. And more importantly, to ensure that it’s well poised to return value for all its customers and shareholders.
Celsius declares $167 million in liquidated cash
Celsius had witnessed a rough business operation pattern since the crypto market took a persistent bearish turn. The ugly situation of the market made it so that it had to freeze all transactions on its platform. This was done in hopes that events will improve as time passes. Obviously, liquidating all its assets seems to be the only way of scaling through the prolonged winter season.
According to the press release, the firm declared the sum of $167 million as its liquidated cash. The cash will be used to cater for the financial needs that arise during this restructuring process.
While the company continues due process in compliance with the chapter 11 filing, its business operations continue.
A special committee of the top shareholders of the company justifies the decision of the firm to halt all withdrawals and trades on its platform. It was added that the move has prevented the company from settling its aggrieved subscribers’ lost investment from its “illiquid or longer-term asset deployment activities”.
The CEO and co-founder of Celsius Network, Alex Mashinsky said that the crypto has competent hands to ensure the smooth running of the restructuring process. He added:
“I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”
Not an isolated situation
Meanwhile, the crypto lender’s case is not an isolated situation. The cryptocurrency industry has witnessed various layoffs and business closures in the past months. But that is a result of the prolonged crypto winter season. Celsius Network joins a host of other crypto firms in choosing the bankruptcy option.
Despite the negative occurrences around the crypto market as of recent, some other crypto firms however remain hopeful for a positive turnaround.