Celsius, Crypto Asset Lender Specialist, Files for Bankruptcy – Science & Technology

Maria Ponnejat and Tom Wilson

(Reuters) – U.S. crypto asset lending specialist Celsius Network said on Wednesday it filed for bankruptcy in New York, adding his name to the list of victims of the market crash.

The New Jersey-headquartered company froze customer withdrawals last month, citing “extreme” market conditions, depriving investors of any access to their savings, adding to the turmoil in the cryptocurrency market.

The most famous cryptocurrency, bitcoin, has lost 70% of its value since its peak in November.

In a case filed on Wednesday in Bankruptcy Court for the Southern District of New York, Celsius estimates its balance sheet to be between $1 billion and $10 billion (the same amount of euros) and has more than 100,000 creditors. His treasury is 167 million dollars.

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

Crypto-asset lenders, including Celsius, have taken full advantage of the boom in this market segment since 2020, promising depositors high returns and easier access to loans than those offered by traditional banks.

Their business model is to provide crypto assets like bitcoin to mostly institutional investors in exchange for compensation.

But its viability has been compromised by the collapse in prices of most cryptoassets in recent months, which led to the collapse of very popular “tokens” like terraUSD or luna in May.

Celsius rival Voyager Digital already filed for bankruptcy a few days ago after suspending all withdrawals and deposits. A third, based in Singapore, Vauld, also froze withdrawals.

Celsius clarified that it did not apply to the competent authorities to allow the resumption of withdrawals from its customers. The freezing of those findings last month prompted financial authorities in the states of New Jersey, Texas and Washington to launch investigations into the company.

(Maria Ponnejat’s report in Bangalore, French version by Marc Angrand, edited by Keith Entringer)


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