Celsius Network is next in line for filing bankruptcy, but they are probably in denial.
Things are not looking so good for the crypto lender Celsius Network. While facing a liquidity crisis, the company has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.
However, the company seems to be in denial when it stated that the reason for this filing is to stabilize its business by restructuring in a way “that maximizes value for all stakeholders.” Celsius said it has $167 million in cash on hand to support operations in the meantime. Earlier, CNBC reported the company’s lawyers were notifying individual U.S. state regulators as of Wednesday evening, according to a source, who asked not to be named because the proceedings were private.
Alex Mashinsky, co-founder and CEO of Celsius Network declared that the decision is right for the company as well as its community. He is confident that this is a historic moment that will be looked back on with the comprehension that acting with resolve and confidence served the community and strengthened the future of the company. Experts believe that it is a trait to avoid freezing customer accounts at a later period by giving the excuse of extreme market conditions. The condition of such a low point for the company is a high impact of the crypto downfall that has been going on for the past few months.
Cryptocurrencies have hardly ever been immune. Since Bitcoin hit an all-time high in November, the value of the world’s most popular digital currency has fallen by about 70%, and its rivals are also suffering. Ether is down by around 70% this year, and so is Dogecoin. Bitcoin’s backers have always claimed the digital currency would be an “inflation hedge,” but in fact, it hasn’t behaved that way. As shares of tech companies have plummeted, so has Bitcoin’s value. What this episode, this crash in crypto prices, shows is that cryptocurrencies are by and largely speculative financial assets that are subject to macroeconomic forces, such as changes in interest rates.
However, Celsius is not the only one that is down at the moment. Voyager filed for Chapter 11 bankruptcy protection last week, after suffering losses due to exposure to now-defunct hedge fund Three Arrows Capital. A judge in the New York bankruptcy court froze Three Arrows Capital’s remaining assets this week. The fund is now in the process of liquidation proceedings.
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Original Source: https://www.analyticsinsight.net/celsius-files-for-bankruptcy-and-calls-it-restructur…
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