Crypto lender Celsius files for bankruptcy
Celsius made headlines in June after the crypto lender unilaterally froze withdrawals following the crisis triggered by LUNA and Terra's crash.
Cryptocurrency lender has filed for bankruptcy in New York, becoming the latest company to fall victim to the current crypto bear run. This new comes days after another crypto lender, Voyager Digital, filed for bankruptcy on July 6.
Reported by Reuters, Celsius has requested the authority not to allow customer withdrawals at this time, although they have $167 million in hand at the moment. This money will be used to provide liquidity for certain day-to-day operations during the restructuring process.
The company is currently under investigation by multiple American state regulators and authorities for the manner in which it unilaterally froze withdrawals from customer accounts in June. Celsius had blamed "extreme" market conditions for the decision, leaving its 1.7 million customers in the lurch.
Additionally, the company is under lawsuit from a former investment manager that worked with it for unpaid dues. The lawsuit implied that Celsius business model was a Ponzi scheme, and that the company had dug itself into a $200 to $300 million hole that could not be explained.
In an attempt to stay afloat, Celsius had let go of 25 percent of its workforce, laying off 150 employees.
The Celsius market crash was triggered by the token crash of the stablecoin UST (Terra) and its fluctuating counterpart LUNA in May. Terra was in the top 10 cryptocurrencies by valuation at the time, and caused an already bearish market to turn into a bloodbath over the last two months.
Edited by Teja Lele
