Celsius Network incurs over $3M in legal fees since the bankruptcy filing

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Celsius, a troubled crypto lending platform, has spent more than $3 million on legal costs as it transitions Chapter 11 bankruptcy proceedings.

According to a statement filed on Friday, Kirkland & Ellis charged the cryptocurrency lender over $2.6 million in fees between July 13 and July 31 for its representation of Celsius in Chapter 11 proceedings. 

Moreover, another filing related to the matter reveals that Akin Gump, another legal advisor, charged over $750,000 for its services from July 13 to August 31. This concludes that the lending company has already spent more than $3 million on legal bills.

Celsius in trouble

After halting transfers and withdrawals due to shaky market conditions in June, Celsius Network filed for Chapter 11 bankruptcy in July. Since then, it has been through restructuring and looking into ways to pay creditors.

With $2.8 billion in crypto liabilities and Kirkland & Ellis predicting that Celsius will be over $40 million in the red by the end of October, later reports have indicated significant financial troubles.

The Vermont Department of Financial Regulation accused the business of operating a Ponzi-like scheme back in September, and in the recent legal filing this month, the company divulged the names of its platform’s users as well as their trading histories. As a result of such occurrences, Celsius has been forced to let go of a significant portion of its top leadership, including the company’s CEO Alex Mashinsky. Notably, the former CEO is said to have also withdrawn $10M from Celsius days before it suspended user withdrawals.

Moreover, another executive Daniel Leon also exited his role as the company continues to face troubles.

An independent examiner appointed by the bankruptcy court to oversee its bankruptcy proceedings is now questioning Celsius about its operations.

Celsius, one of the biggest crypto lenders in the market, had over $12 billion in assets under management and over $8 billion in client loans before experiencing a liquidity crisis that was partially attributed to its business model.

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