Another corporate victim of the crypto crash has emerged: Celsius Network has filed for Chapter 11 bankruptcy protection. The future of the crypto lending company has been in doubt since it abruptly ceased all withdrawals and transfers exactly one month ago. It now hopes to continue operations with the $167 million in cash it still has while bankruptcy courts restructure the company.
According to the filing, Celsius Network has between $1 billion and $10 billion in assets but owes a similar amount. The five largest claims range in value from $20 million to $80 million. Before this year’s sell-off, the company was valued at $3.25 billion and managed assets worth up to $24 billion. This was reportedly around $12 billion before it locked withdrawals, but the bankruptcy filing suggests it now has less.
Celsius now claims that it paused withdrawals last month to avoid a bank run: “Without a pause, the acceleration of withdrawals would have allowed 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 received a recovery,” according to a portion of the company’s press release today.
Three Arrows, a cryptocurrency hedge fund, was also forced to declare bankruptcy earlier this month.
