Market Analysis Report (14 Jul 2022)

Troubled crypto lender Celsius Network has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. In a statement, the firm said the filing follows “the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers.”

According to the statement, if withdrawals weren’t halted then their acceleration would have continued to increase, allowing “certain customers—those who were first to act—to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.”

Celsius co-founder and CEO, Alex Mashinsky, said the move is the “right decision” for the company and its community, adding he is confident that looking back at Celsius’ history “ we will see this as a defining moment.”

Celsius suspended withdrawals on June 12, cut jobs, and hired restructuring experts to advise on its financial situation. The firm says it has $167 million in cash on hand, enough to “support certain operations during the restructuring process.”