Celsius Network hires restructuring lawyers after freezing accounts

During these hard times leading to account freeze decisions, crypto lending platform Celsius Network has reportedly hired restructuring lawyers from the prestigious law firm Akin Gump Strauss Hauer & Feld LLP.

Celsius to take help for solving its financial issues

According to a recent report by The Wall Street Journal, the “people familiar with the matter” revealed that Celsius is seeking help from the newly hired attorneys to advise on possible solutions for its mounting financial issues.

After saying that it is working fine amid the market instability in May, Celsius Network recently announced that it is pausing all withdrawals, swaps, and transfers between accounts, citing extreme market volatility. 

.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2

— Celsius (@CelsiusNetwork) June 13, 2022

The utility native token of the network, CEL, dropped by more than 52% on Monday but soon recovered back by seeing a surge in its value in the past 24 hours. In the last three days, it has sent around 104,000 ETH to FTX, including 50,000 ETH on June 13, 12,000 ETH on June 12, and 42,000 ETH on June 11. It also transferred approximately 9,500 WBTC to FTX on June 13.

Wsj said that one of the individuals acquainted with the situation revealed that Celsius is first seeking new funding options from investors, but it is also considering other strategic options, such as financial restructuring.

Celsius earns money by lending out consumer deposits to other users. On cryptocurrency deposits, it offers users annual percentage rewards of up to 18.63 percent. According to the company’s website, it managed $11.8 billion in assets as of May 17 . According to the company, it has around 1.7 million users.

Lawmakers have recently considered what would happen if a cryptocurrency platform collapses. Last week, a bipartisan group of senators suggested legislation to protect investors in the event that a crypto exchange goes bankrupt by ensuring that their digital assets are kept separate.

Notably, Celsius Network’s rival company Nexo has expressed its intentions to acquire some or all collateralized loans of the company, as TheCoinRise reported.