Cryptocurrency lender Celsius, facing bankruptcy, has hired a new law firm to restructure its debt.
Sources familiar with the matter told the Wall Street Journal that Celsius has stopped working with lawyers from Akin Gump Strauss Hauer & Feld LLP and has hired lawyers from Kirkland & Ellis LLP.
The company offered clients high-yield loans up to 18% on deposits. However, in June, facing liquidity issues, Celsius suspended withdrawals, assuring users that they would “continue to receive rewards.”
“We are taking these necessary actions for the benefit of our entire community to stabilize liquidity and operations while taking steps to preserve and protect assets. We are working hard to fulfill our obligations,” said Celsius.
During the crisis, Celsius lost $350 million in assets as it used $534 million in customer deposits to implement “high-risk leveraged crypto trading strategies” through a third-party asset manager.
Although Celsius has not filed for bankruptcy, it has faced growing client concern about its ability to pay. The merger with Kirkland & Ellis LLP may indicate a change in the overall problem solving strategy.
Recall that last week, the cryptocurrency lending service Celsius transferred 25,000 wBTC tokens worth $528 million to the FTX exchange. The community fears that Celsius will sell tokens and bring down the bitcoin rate.
Source: Bits
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