Just a month after locking up some $12 billion USD in cryptocurrency due to “extreme market conditions,” Celsius has declared chapter 11 bankruptcy.
In what they called a “difficult but necessary decision,” Celsius justified its halt on withdrawals citing that it would have led to even more chaos with the accelerated withdrawals, giving those who acted first a full payout while leaving other customers behind while it attempted to pull funds from illiquid or long-term assets.
This Chapter 11 proceeding will allow for the company to stabilize and restructure the business as it looks to maximize value for its stakeholders. Alex Mashinsky, Co-Founder & CEO of Celsius commented, “This is the right decision for our community and company. We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”
With $167 million USD in cash, Celsius will continue to operate where it will use its funds to support business activities without disruptions. Customers’ withdrawals are still halted and claims will be addressed at a later date.
JUST IN: Celsius native token $CEL falls 48.85% after filing for Chapter 11 bankruptcy hours ago. pic.twitter.com/uandDTAF4P
— Watcher.Guru (@WatcherGuru) July 14, 2022
In other news, liquidators are unable to find bankrupt crypto hedge fund founders.
wazup.