Celsius Files for Chapter 11 Bankruptcy Amid Insolvency Woes

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Embattled crypto lender, Celsius Network has finally filed for Chapter 11 Bankruptcy in New York according to details from Court filings. The bankruptcy filing is coming a month after it halted withdrawals amidst insolvency fears. 

Per the filings, Celsius Network said it has as many as 100,000 listed creditors at the time it halted the withdrawals and per the assets declared, it said it has between $1 billion and $10 billion. The company reiterated that its liabilities also fall within this range.

While there are many creditors with varying amounts of funds owed to them by the company, Celsius pointed out that Pharos USD Fund SP and Pharos Fund SP come off as its largest creditor with over $81 million. Other creditors worth noting include but are not limited to ICB Solutions, The Caen Group LLC, Alameda Research, B2C2, and Covario AG.

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The company also revealed that it currently has as much as “$167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.”

A Chapter 11 bankruptcy is a way of restructuring your liabilities while still continuing regular operations. Celsius Network is billed to be represented by Kirkland & Ellis LLP per the filing.

Chapter 11 Bankruptcy – Best Course for Celsius

According to earlier reports, Celsius Network kicked against filing for Chapter 11 bankruptcy since it became incapacitated a little over a month ago. This caused an internal uproar that eventually lead the firm to change its advisors last week as reported by the Wall Street Journal.

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However, with the latest filing, the tides seem to have changed and Celsius leaders now believe this to be the best course of action for the firm, its users, and its creditors.

“This is the right decision for our community and company,” Mashinsky said in a statement. “We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”

Besides Celsius, Voyager Digital and Three Arrows Capital have also filed for some forms of bankruptcy in the United States.

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