Crypto lender Celsius Network officially filed for bankruptcy protection after being hit hard by the recent crypto market crisis. The decision comes after Celsius stopped withdrawals from its platform last month. Fellow crypto-lender Voyager Digital previously also made the same move.
According to the court documents filed by Celsius Network, the company has $167 million on hand for operations during the restructuring process. It also has $4.3 billion in total assets and $5.5 billion in liabilities. The court filing also shows that the lender currently owes users $4.7 billion.
Celsius Network had a rapid rise during the pandemic, but an even faster downfall after the cracks started to show in the crypto market. For Celsius, just like for many other crypto firms, the trouble started with the collapse of stablecoin Terra Luna and the resulting loss in value of popular cryptocurrencies like Bitcoin and Ether.
Finding itself in a pinch, Celsius made a decision to stop withdrawals from the platform in June. The users were locked out of their funds, and it is unclear if and when they’ll get their money back. With the bankruptcy now in place, many experts believe the users shouldn’t get their hopes high, especially since the company noted in its T&Cs that “in the event of bankruptcy, customers might not get all – or indeed any – of their money back.”
Besides Celsius and Voyager Digital, several other crypto firms filed for bankruptcy in recent weeks. The list includes crypto fund Three Arrows Capital.