Celsius Network, a U.S. crypto lender, declared bankruptcy on Wednesday, becoming the latest victim of the cryptocurrency sector’s steep price drop.
Based in New Jersey According to a court filing in the United States Bankruptcy Court for the Southern District of New York, Celsius reported estimated assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion.
During the COVID-19 pandemic, cryptocurrency lenders proliferated, attracting depositors with high-interest rates and fast access to loans that traditional banks rarely supplied. They have, however, fallen in recent months as a result of a drop in cryptocurrency prices and the collapse of the major coin TerraUSD in May.
Voyager Digital Ltd (VOYG.TO), another cryptocurrency lender, declared bankruptcy on July 6 after stopping withdrawals and deposits.
Celsius is not requesting authorization to allow customer withdrawals at this time, according to a press release issued on Wednesday, adding that it has filed a number of typical petitions with the court to allow it to continue operating as usual.
The company now has $167 million in cash on hand, which will be used to fund some operations during the reorganization process. Last month, Celsius suspended withdrawals and transfers, citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets. State securities regulators in New Jersey, Texas, and Washington were moved to probe the decision.
