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Celsius Network Taps More Advisers To Prepare For Potential Bankruptcy
Crypto lending platform hires restructuring consultants from Alvarez & Marsal as customer withdrawals remain frozen.
Harshvardhan
9:17 24th Jun, 2022
Markets

Celsius Network LLC has hired restructuring consultants from advisory firm Alvarez & Marsal to advise on a possible bankruptcy filing, according to people familiar with the matter, as the crypto lending platform contends with the recent collapse in digital currencies.

Celsius, which said it had $11.8 billion in assets as of May and has 1.7 million users, froze withdrawals, swaps, and transfers earlier this month due to extreme market volatility. The value of its assets has fallen from about $25 billion in October. The company also engaged law firm Akin Gump Strauss Hauer & Feld LLP to advise on possible restructuring options, The Wall Street Journal reported earlier this month.

Representatives for Celsius and Alvarez & Marsal didn’t respond to requests for comment.

Celsius pays users annual percentage yields of up to 18.63% on cryptocurrency deposits, then uses those deposits to make crypto loans. It also provides cash loans to people who pledge their crypto assets as collateral.

Celsius said in a blog post Sunday that “we want our community to know that our objective continues to be stabilizing our liquidity and operations. This process will take time.”

The company added that it plans to continue working with regulators and officials regarding its pause in withdrawals, swaps, and transfers and its “determination to find a resolution.”

Cryptocurrencies soared in value over much of the past two years, but a selloff in speculative assets has dragged down digital assets, wiping out about $2 trillion in their total market value in recent months. The price of bitcoin fell below $18,000 last weekend, down more than 70% from its November high, before staging a modest comeback to above $21,000 this week.

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