Celsius files for ‘immediate’ bankruptcy

Cryptocurrency lender Celsius has filed for “immediate” bankruptcy in the Southern District of New York, under the provisions of the US Chapter 11 Bankruptcy Code.

Celsius has been one of the largest cryptocurrency lending services – as of May of this year, the company owned a loan portfolio of $8 billion and managed $12 billion in funds. At the beginning of July, Celsius had about $820 million in debt, with most of the debt already paid. However, it is not yet clear whether Celsius has enough funds to pay out deposits to customers.

The company emphasized its intention to pay off all debts, but financial specialists fear that the recovery process will drag on for a long time and become a repeat of the situation with the MtGox exchange. For example, this opinion was expressed by the head of the tax department of the company Konly Danny Talwar (Danny Talwar).

In a statement, Celsius management said it plans to use $167 million in funds to “continue certain activities” during the restructuring process. In the future, it is planned to restore “activity on the platform” and “return funds to customers.” In the meantime, the withdrawal of funds for users of the service is disabled.

“This is the right decision for our user community and company. We have a strong and experienced team to guide Celsius through this process. And I am sure that when we look back in the future, this will be a defining moment in the history of Celsius, when our strong actions helped the community and secured the future of the company,” wrote Celsius co-founder and CEO Alex Mashinsky.

Earlier it was reported that the Vermont authorities were involved in the prosecution of the Celsius service. In addition, the other day it became known that Celsius hired a new law firm to restructure the debt.

Source: Bits

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