Major crypto bank declared bankrupt – ICT news

One of the leading cryptocurrency platforms, Celsius Network, has filed for bankruptcy. It thus imitates a whole host of other companies that did not survive the crypto crash.

Celsius Network, a New Jersey-based start-up, is one of the leading cryptocurrency lending platforms. It has just declared bankruptcy, a month after freezing its assets “due to extreme market conditions.”

Celsius is basically a bank for cryptocurrencies. It allowed users to deposit their bitcoins, ethereums and tethers on the platform and in return paid them weekly interest of up to 18 percent in some cases. But the company ran into trouble when the cryptocurrency market crashed a few weeks ago. The value of currencies like bitcoin, which has already been very volatile anyway, has fallen from around €60,000 to less than €20,000 in the past eight months, especially after the implosion of the TerraUSD cryptocurrency in May. In response, Celsius froze its accounts, making it impossible for users to withdraw funds.

Protection

The measure caused panic among users and raised doubts about Celsius’s reserves and/or whether it could return its money to anyone. The company is valued at $3.25 billion by investors after two rounds of funding and reportedly has some 1.7 million users. Furthermore, according to the file filed with the court, it has 1 to 10 billion dollars in financial resources and more than 100,000 creditors. By declaring bankruptcy, Celsius Network hopes to gain protection from these creditors, in order to stabilize its business.

Research from various media, including the Financial Times, already shows that Celsius is at a high risk in the field of loans and investments. Towards its fall, Celsius is now on a mini-list of other major crypto firms that have had to admit defeat in recent months in the face of this market’s crash. Investment fund Three Arrows Capital, which focuses on crypto companies, filed for bankruptcy earlier this month, as did platforms Luna and Voyager Digital.

Celsius Network, a New Jersey-based start-up, is one of the leading cryptocurrency lending platforms. It just filed for bankruptcy a month after it had frozen its assets ‘due to extreme market conditions’ Celsius is basically a cryptocurrency bank. It allowed users to deposit their bitcoins, ethereums and tethers on the platform and in return paid them weekly interest of up to 18 percent in some cases. But the company ran into trouble when the cryptocurrency market crashed a few weeks ago. The value of currencies like bitcoin, which has already been very volatile anyway, has fallen from around €60,000 to less than €20,000 in the past eight months, especially after the implosion of the TerraUSD cryptocurrency in May. In response, Celsius froze its accounts, making it impossible for users to withdraw their funds, even returning their funds to anyone. The company is valued by investors at $3.25 billion after two rounds of funding and reportedly has some 1.7 million users. Furthermore, according to the file filed with the court, it has 1 to 10 billion dollars in financial resources and more than 100,000 creditors. By declaring bankruptcy, Celsius Network hopes to gain protection from these creditors in order to stabilize its business investments. Towards its fall, Celsius is now on a mini-list of other major crypto firms that have had to admit defeat in recent months in the face of this market’s crash. Investment fund Three Arrows Capital, which focuses on crypto companies, filed for bankruptcy earlier this month, as did platforms Luna and Voyager Digital.

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