As the repercussions of the collapse of global cryptocurrency networks continue, Celsius Networks files for bankruptcy via Chapter 11 bankruptcy protection. The Celsius Network has confirmed that it has initiated the bankruptcy process. Celsius Networks files for bankruptcy as an outcome of the recent decline in cryptocurrency prices and the failure of the key coin TerraUSD in May, the volume of crypto loans has plummeted during the past several months.
The previous month, Celsius put a hold on withdrawals and transfers between accounts, citing very volatile market conditions. State securities regulators had scrutinized the decision of the cryptocurrency lender in the states of New Jersey, Texas, and Washington.
Members of the special committee of the board of directors of Celsius made the following statement on Wednesday in response to the news that the Company had submitted a petition for protection under Chapter 11: “Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers. Without a pause, the acceleration of withdrawals would have allowed certain customers, specifically those who were the first to act, to be paid in full while leaving other customers behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.
The American corporation reported that it had 167 million dollars in cash available to offer liquidity to support various operations while the Company was reorganizing. On a consolidated basis, the Company calculated that its assets and liabilities amounted to between $1 billion and $10 billion.
According to a press release issued by the firm, Celsius did not request the power to permit customer withdrawals at this time. The Company also stated that it had filed court petitions to allow it to continue operations in the usual course of business. According to Celsius, the Chapter 11 process would investigate and resolve customer grievances.
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