Rumors become reality Crypto lending platform Celsius officially files for bankruptcy protection

After weeks of speculation and rumors, lawyers representing crypto lending platform Celsius have officially notified regulators that the company is filing for bankruptcy, according to The Wall Street Journal.

Rumors become reality Crypto lending platform Celsius officially files for bankruptcy protection

“This is the right decision for our community and company, and we have a strong and experienced team to lead Celsius,” Celsius co-founder and CEO Alex Mashinsky said in a press release late Wednesday. Complete the process. I am confident that as we look back on the history of Celsius, we will see it as a defining moment.”

Celsius said filing for bankruptcy protection will provide an opportunity to stabilize its business and complete a comprehensive restructuring that maximizes value for all stakeholders. Celsius and some of its subsidiaries filed a “petition for voluntary Chapter 11 reorganization” in the U.S. Court for the Southern District of New York, which the company said had “$167 million in cash to support operations.”

The news of Celsius filing for bankruptcy represents the latest company to fail during a harsh crypto winter.

Celsius paid off the last portion of its remaining debt by repaying nearly $50 million in debt to Compound’s lending agreement in two transactions, BitTweet reported earlier today. Since June 10, the company has repaid an estimated more than $800 million in debt across Aave, MakerDAO and Compound.

Vermont financial regulators claimed Celsius was “significantly insolvent.” The Vermont Department of Financial Regulation (DFR) issued a warning to the beleaguered Celsius on Tuesday, reminding users that the cryptocurrency lending company is not licensed to provide services in the state. Regulators in the state have accused the cryptocurrency lending company of mismanaging, allocating clients’ funds to high-risk and illiquid investments.

Six state regulators have launched investigations into Celsius. The Vermont Department of Financial Regulation said Celsius “deploys client assets in a variety of risky and illiquid investing, trading and lending activities.”

In a statement, the Vermont regulator said: “Celsius customers have not received critical disclosures about their financial condition, investment activities, risk factors and ability to repay their debts to depositors and other creditors. The company’s assets and investments may not be sufficient. Pay its outstanding debts.”

Celsius said it will not currently seek court approval to allow customers to withdraw money, meaning the accounts will remain frozen while the lender restructures and processes customer claims through Chapter 11 of the bankruptcy code.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/rumors-become-reality-crypto-lending-platform-celsius-officially-files-for-bankruptcy-protection/
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