Celsius finally files for bankruptcy
Celsius Network, a US crypto lender, announced on July 13 that it has filed for Chapter 11 restructuring, i.e. bankruptcy
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Due to "extreme" market conditions, New Jersey-based Celsius last month put a freeze on withdrawals, preventing individual investors from accessing their cash and shaking the crypto market. The Network has filed for a Chapter 11 bankruptcy at the US Bankruptcy Court for the Southern District of New York.
According to blockchain data analytics tracker Zapper, Celsius repaid more than $900 million of its debt last month to the decentralised platforms Aave, Compound, and MakerDAO. Sam Bankman-Fried, the co-founder of the crypto billionaire Alameda Research, was identified as one of the primary creditors in the Southern District of New York petition.
According to court documents, the platform had around $4.3 billion in assets vs $5.5 billion in liabilities as of July 13. Alex Mashinsky, CEO of Celsius, stated in a sworn declaration that the company has been seeking to get new finance from outside parties, but those discussions made it evident that a bankruptcy petition was required.
According to court documents, Celsius has a $1.2 billion hole in its balance sheet. The company has $5.5 billion in liabilities, of which $4.7 billion are client holdings, and only $4.3 billion in assets, most of which are highly illiquid.
The struggling crypto-lending platform was warned about by Vermont's Department of Financial Regulation (DFR) on July 12, informing customers that it lacks a licence to operate in the state.
