Celsius, the crypto lender that last month halted withdrawals, has filed for Chapter 11 bankruptcy protection, the company said in a press release. User withdrawals will remain halted.
“This is the right decision for our community and company,” Celsius CEO Alex Mashinsky wrote in the statement. “We have a strong and experienced team in place to lead Celsius through this process.”
Celsius filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York to start a financial restructuring process, the company said on its website.
Celsius has $167M in cash to support certain operations during the restructuring process, according to the press release. Celsius has filed a motion to request to pay employees and continue their benefits.
Withdrawals Remain Halted
Celsius is not requesting authority to allow customer withdrawals, according to the press release.
“Most account activity will be paused until further notice. Withdrawals, Swap, and transfers between accounts will remain paused, and rewards will stop accruing as of the date of the filing,” according to the company’s website.
While withdrawals, transfers, swaps and yield on deposits are halted, loans “originated by Celsius affiliates will continue to be serviced.” No new loans will be issued.
Goods or services provided from July 13 on will be paid but those provided before the filing date are considered “pre-petition” and cannot be paid without the Court’s permission, according to Celsius’s website.
Kirkland & Ellis LLP is serving as legal counsel, Centerview Partners is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to Celsius.
David Barse, CEO of XOUT Capital, an index company, and DMB Holdings, a private family office; and Alan Carr, an investment professional with experience leading complex restructurings, were named directors of the company.