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Celsius Network, one of the world's largest cryptocurrency companies, has filed for bankruptcy in the United States. The platform, based in New Jersey, thus joins the long list of companies in the sector in trouble due to the tightening of monetary policy and the so-called 'crypto-winter', an expression coined to refer to the long bearish periods and high volatility of cryptocurrencies. like bitcoin, whose price has returned to below $20,000 this Thursday.
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Celsius Network has assets and debts that range from a wide range of 1,000 to 10,000 million dollars. However, the firm only has 167 million liquidity available to meet the costs of the restructuring with which it seeks to stabilize its business and be able to get out of bankruptcy. The decision to seek the protection of chapter 11 of the United States Bankruptcy Law comes after the platform suspended all transactions between clients in mid-June and vetoed the withdrawal of capital due to "extreme conditions" of the market.
- Is Celsius insured against theft or damage?
- as a celsius user and with the request of chapter 11 you will ask yourself what the future holds?
- According to the insurance, when will we be able to withdraw our money or assets?
- What does it mean for customer loans?
- We have seen what comes from the client, but what happens from the suppliers?
Is Celsius insured against theft or damage?
The previous week, cryptocurrency lender Voyager Digital filed for bankruptcy, while other companies such as CoinFlex and Babel Finance froze withdrawals due to lack of liquidity.
The cryptocurrency investment platform Celsius announced on Wednesday (07.13.2022) that it is filing for bankruptcy in the United States, a month after freezing withdrawals from its system on behalf of other similar services.
In its statement, Celsius said it was seeking to restructure to "maximize value for all stakeholders" and said it had $167 million in cash on hand to meet urgent needs.
Had withdrawals not been frozen on June 12, the rout "would have allowed some customers, the first to withdraw, to be fully refunded while leaving others waiting," the special committee of Celsius's board of directors said, citing the statement. .
Celsius filed for Chapter 11, which in the United States allows companies that cannot pay their debts to restructure and remain safe from their creditors while continuing to operate. "This is the right decision for our community and our business," said Alex Mashinsky, co-founder and CEO of Celsius.
The previous week, cryptocurrency lender Voyager Digital filed for bankruptcy, while other companies such as CoinFlex and Babel Finance froze withdrawals due to lack of liquidity. In the crypto industry, Celsius was one of the biggest players with 1.7 million customers as of June 2022.
Bitcoin, the star cryptocurrency, has lost more than half of its value since the beginning of 2022 and is trading around $20,000, after reaching almost $69,000 in November 2021.
Recently celsius announced that:
has initiated a financial restructuring process to provide the company with the best opportunity to stabilize the business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.
To implement the restructuring, Celsius and certain of its subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
as a celsius user and with the request of chapter 11 you will ask yourself what the future holds?
The company's intention is that this process maximizes value for all stakeholders. His goal is to position Celsius to emerge as a stronger company.
This process will provide us with the best opportunity to consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.
As part of the process, it is intended to present a plan that will restore activity across the platform and this will return value to customers and provide choice.
According to the insurance, when will we be able to withdraw our money or assets?
On June 12, 2022, we made the difficult but necessary decision to pause withdrawals, exchanges, and transfers on our platform in order to stabilize our business and protect our customers.
Most account activity will be paused until further notice. Withdrawals, exchanges, and transfers between accounts will remain paused and rewards will stop accruing as of the date of submission. Celsius is not requesting authority to allow customer withdrawals at this time.
What does it mean for customer loans?
Existing loans originated by Celsius affiliates will continue to be serviced. Maturities, margin calls, and interest payments will continue as in the past.
Celsius will not be issuing new loans at this time.
See below for more information on loans.
Do we as customers need to remove the Celsius app/delete or disable our accounts?
Hell no, every customer is suggested and encouraged to keep their app active.
We have seen what comes from the client, but what happens from the suppliers?
Supplier payments in the future will depend on when the goods or services were provided to Celsius.
Goods or services rendered after July 13 are considered “post-petition” and will be paid in the normal course. In fact, the Court requires us to pay all of our post-petition obligations as they come due.
Goods or services provided before the filing date are considered “pre-petition” and cannot be paid for without the permission of the Court. The treatment of pre-petition obligations is generally determined at the end of the Chapter 11 case.
If you have further questions or concerns, don't forget that you can find additional information about filing Chapter 11, including court documents, at https://cases.stretto.com/celsius. Customers with questions about the process can call the Company's Claims Agent, Stretto, at +1 (855) 423–1530 (US) or +1 (949) 669–5873 (international) or send a email to firstname.lastname@example.org.