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The New Jersey based company Celsius has filed for a Chapter 11 bankruptcy in a U.S Court in the Southern District of New York.
Source : Protocol
Citing “extreme market conditions”, Celsius has chosen to freeze withdrawals as early as last month, prompting investigations by state security regulators in New Jersey, Washington and Texas into the crypto lending firm.
According to the company’s press release on Wednesday, the 13th of July, Celsius is not requesting authority to allow customer withdrawals.
Additionally, the crypto lending firm has filed a series of customary motions with the court to allow it to continue operations as before.
The company has 1.7 million users and 100,000 creditors.
Celsius’s largest unsecured claim is $81 million from Pharos Fund based in the Cayman Islands.
Celsius profited on the rising crypto market by taking the crypto of depositors and giving it to counterparties who would pay sky high interest rates.
If the transaction was successful, Celsius could pay off the returns promised to depositors and make money in the process.
Celsius has listed their existing assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion.
The company also has $167 million cash in hand, which will help to provide liquidity to operations during the restructuring process.
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