The efforts of crypto lender platform, Celsius Network appear to be fruitless with the latest news that the company is filing bankruptcy.
It is understood the bankruptcy filing was filed in the United States Bankruptcy Court (US) Southern District of New York in the early morning of July 14 local time.
According to another source who did not want to be identified, the platform filed for Chapter 11* bankruptcy in a confidential proceeding that is still ongoing.
*U.S. bankruptcy legislation Chapter 11 allows a company to continue operating while restructuring its debt over a period of time and in some cases, it can borrow money to help restructure its debt.
Currently the company is said to have $ 167 million to be liquidated to support the restructuring, with underlying assets and liabilities consolidated in the range of $ 1 billion to $ 10 billion.
This indirectly marks Celsius joining crypto lending company, Voyager Digital Ltd which filed for bankruptcy following the collapse of the crypto market.
It is common knowledge that the crypto market, which enjoyed its best period when Covid-19, experienced a sharp drop in price this year with the key token TerraUSD collapsing in early May.
Turning to the Celsius news, it is still unknown the fate of depositors who have assets in the loan platform.
So far the Chief Executive Officer (CEO), Alex Mashinsky has not issued any comments on the issue of the depositors.
Meanwhile, the Department of Financial Regulation (DFR) issued a warning on troubled crypto lending firms as a reminder to consumers that the companies were not licensed.
