THE BANKRUPTCY OF CRYPTO CREDITORS HAS BEGUN

Last Wednesday, the Celsius Network company filed for bankruptcy in a New York court. The firm has become a victim of the catastrophic collapse of crypto prices that occurred in the financial market. According to experts, the organization could not tolerate the collapse of the TerraUSD token, which occurred in May 2022.

About a month ago, Celsius, whose office is located in New Jersey, started freezing funds and transfers. About 1.7 million investors became victims of such a decision, which does not allow them to buy out their own assets. As a result, state regulators in Texas, Washington and New Jersey announced the beginning of an investigation into the incident.

In the materials of the application to be considered by the court in the Southern District of New York, it is reported that the company has assets and liabilities of more than 100 thousand creditors in the amount of $ 1 billion to $ 10 billion. To maintain liquidity for the period of the trial, the company has about $167 million in cash.

In May, Celsius had $11.8 billion in assets under management.

Subsequently, the organization was forced to lay off about 150 employees and block access to finance for the mass of customers. The top management of the organization, who had previously promised individual investors a yield of up to 30%, explained these events by "extreme market conditions."

According to Coinmarketcap, the price of the platform's token collapsed by 50% after the platform announced a complete suspension of operations on June 12. For the first time since January 2021, the global capitalization of the crypt has fallen below $ 1 trillion.

It is known that Kirkland & Ellis LLP will be the legal advisor to Celsius in the restructuring process. It is also planned to involve Alvarez & Marsal specialists in the work.

Financial consulting of the company will be provided by Centerview Partners.

Experts note that the Celsius Network is far from the only participant in the cryptocurrency market that has declared bankruptcy. Earlier, a similar statement was made by Voyager Digital Ltd. It has also suspended withdrawals and deposits. Without announcing a default yet, the withdrawal of funds was also slowed down by the Singapore Vauld.

 

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