The CEO of the cryptocurrency project Celsius Alex Mashinsky confirmed that his company has filed for bankruptcy. The entrepreneur noted that after a month of discussions, the yield platform finally decided to file for Chapter 11 bankruptcy. This gives the firm time to stabilize its business and allows for a full restructuring process. Analysts noted that investors have lost hope of getting their money back.
Cryptocurrency finance company Celsius Network, one of the largest cryptocurrency lenders, has launched bankruptcy proceedings. Prior to that, Celsius Network blocked withdrawals and transfers in June, freezing billions of dollars in customer assets in more than a million accounts.
On July 14, Celsius Network said on Twitter that it, along with certain subsidiaries, had filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. According to the company, this will ensure it can “stabilize its business” and undertake a comprehensive restructuring that “maximizes value for all stakeholders.”
“Today’s filing follows Celsius’ difficult but necessary decision last month to suspend withdrawals, swaps and transfers on its platform in order to stabilize its business and protect its customers,” Celsius said in a press release from a special committee of the board.
The board noted that if not for the suspension of withdrawals, the first people to start withdrawing would have received funds in full, leaving others to wait while Celsius extracted cash from illiquid or long-term asset allocation transactions.
The executive said he had $167 million that could be used to keep the site running and pay the firm’s employees. Also, Maszynski confirmed that he had indeed appointed David Bars and Alan Carr as new directors, and Messrs. Kirkland and Ellis would serve as legal counsel.