Around a month ago major crypto lender, Celsius, announced that: “Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swaps, and transfers between accounts.” The fact that conditions got so bad that they had to stop operations altogether was a major red flag for Celsius as a firm and crypto at large. The struggle for Celsius has only gotten worse, with the firm recently announcing that they have begun the process of filing for Chapter 11 bankruptcy protection.
The specific statement released by Celsius yesterday said it would look to stabilize its business by restructuring in a way “that maximizes value for all stakeholders.” At the moment, Celsius said it has $167 million in cash on hand to support operations in the meantime. This money won’t last long though and will just support the company as they finish the bankruptcy process. Just a month ago the company was in a position of having nearly $12 billion in assets under management and 1.7 million customers. The trouble doesn’t stop at bankruptcy, however, with over six state regulators already launching investigations into Celsius for “deploying customer assets in a variety of risky and illiquid investments, trading, and lending activities.”
What do you think of the collapse of Celsius and what will happen to the firm in the long term?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.