The last time it was on our radar, crypto lender Celsius halted its operations which include withdrawals, swaps, and transfers. The cryptocurrency firm which exists in the infantile crypto lending space cited extreme market conditions as the reason for its decision. Celsius is once again in the news and this time the crypto lender has filed for bankruptcy.
New Jersey-headquartered crypto lender Celsius filed for bankruptcy on Wednesday following the latest events of price crashes in the cryptocurrency space. The latest development makes the lender the latest company to succumb to the pressure of the unstable crypto sector, as various companies are looking to minimize their losses with big names such as Coinbase reducing their workforce.
According to a court filing, Celsius made in the US Bankruptcy Court for Southern District of New York, the company listed estimated assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion.
The infantile crypto lending sector made some huge progress thanks to companies like Celsius. This embryonic sector had its boom during the Covid-19 pandemic as depositors were attracted by high-interest rates while lenders were particularly stunned by how easy it was to access loans, especially when compared to traditional lenders.
Celsius isn’t the only crypto lender that has filed for bankruptcy. Voyager Digital, another crypto lender, filed for bankruptcy last week not too long after it paused deposits and withdrawals.
Per a Wednesday press release, Celsius said that it has filed a series of customary motions with the court to allow it to continue its operations in the normal course, and is not requesting that customer withdrawals be allowed at this time. The company has $167 million in cash on hand. This will be used to provide liquidity to support specific operations as the company embarks on a restructuring process.