C Filed for bankruptcy a month after freezing withdrawals, amid industry turmoil

Cryptocurrency investment platform Celsius announced on Wednesday that it has filed for bankruptcy in the US, a month after freezing withdrawals from its platform, in the latest sign that an industry… industry is unstable.

In his statement, PoisonThe company suspended withdrawals in mid-June, said it was looking to restructure in a way that maximizes value for all stakeholders, and said it had $167 million (about 1,300 crore) available. ) cash to meet urgent needs during this time.

Without a freeze on withdrawals, “acceleration … would allow some customers – the first to act – to be paid in full while leaving others waiting”, Celsius board’s special committee said quoted in the statement said.

In the US, Chapter 11 allows an insolvent company to be restructured from its creditors, while continuing to operate currently.

“This is the right decision for our community and our company,” said Alex Mashinsky, co-founder and CEO of Celsius.

“I am confident that looking back at C’s history, we will see this as a defining moment where acting with determination and confidence serves the community and strengthens the future of the company.”

Last week, electronic money loan specialist Voyager Digital also submit for bankruptcy.

Other companies have suspended withdrawals, such as CoinFlex and Babel Finance, due to cash shortages.

Singapore-based investment firm Three Arrows Capital is liquidating.

Such companies have tried to attract banks by lending money and earning interest on deposits, but they are suffering from a sharp decline in cryptocurrencies in a market that is not interested in risky bets. .

Before suspending withdrawals, Celsius Network offered interest rates of more than 18% for savers, but 0.1% for borrowers.

Celsius is one of the biggest players in the field. It reported having 1.7 million customers in June.

The bitcoin cryptocurrency has lost more than half of its value since the start of the year and is currently trading at just over $20,000 (approximately Rs 15,96,900). It was worth nearly $69,000 (about Rs 55,09,200) at its peak in November 2021.

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