Celsius Network Files for Bankruptcy Protection, Leading to a 50% Loss for CEL

The Celsius Network filed for bankruptcy protection less than a day after Vermont’s Department of Financial Regulation (DFR) reported that the embattled crypto lender was “deeply insolvent.”

Celsius Files for Bankruptcy Protection

A month after freezing customer assets at the peak of the crypto crash, one of the biggest crypto lenders, Celsius, has started filing for Chapter 11 bankruptcy protection.

In a statement issued on Wednesday, Celsius said the decision to file for bankruptcy was “necessary” to provide the crypto company with an “opportunity to stabilize its business.”

According to Alex Mashinsky, co-founder and chief executive of Celsius, the company has $167 million in cash on hand to support operations in the meantime.

Celsius Completes DAI Loan Repayment 

The filing for bankruptcy was made when Celsius paid off its last major outstanding debt of $50 million to DAI.

In return, Celsius received its collateral for the loan: almost $200 million worth of wrapped Bitcoin, or WBTC.

Celsius Falls 50% Under Pressure 

The announcement merely confirmed the suspicion of traders, who proceeded to dump the Celsius token, CEL. The sell-off saw the price of CEL crash as much as 50%, dropping from a high of $0.9549 to as low as $0.4239.

The 24-hour price chart of Celsius (CEL). Source: CoinMarketCap

CEL now trades at $0.6599 and is ranked as the 148th largest crypto, as its market cap slipped to $153.8 million.

On the Flipside

  • On Thursday, the Celsius team was sued for manipulation and improper risk management by former investment manager Jason Stone, mounting increasing pressure on the firm.

Why You Should Care

Through the bankruptcy filing, Celsius hopes to restructure its business in a way “that maximizes value for all stakeholders.”

Get all the info about the withdrawal pause by Celsius in:

Celsius Crypto Exchange Pauses All User Activity, Sends $320M to FTX

Read about the Celsius lawsuit in:

Lawsuit Accuses Celsius Network of Fraud

The Celsius Debt repayment is covered below:

Celsius Network Aggressively Repays Debts – Liquidation Price Falls Under $5,000

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia