- Jul 27, 2015
Cryptocurrency loan company Celsius filed for bankruptcy under Chapter 11 yesterday, one month after the lender announced it was suspending withdrawals.
The petitions for reorganization give Celsius "the best opportunity to stabilize the business, consummate a comprehensive restructuring transaction that maximizes value for all stakeholders, and emerge from Chapter 11 positioned for success in the cryptocurrency industry," the company said. In an FAQ updated yesterday, Celsius told users that withdrawals are still suspended. As part of the bankruptcy process, Celsius said it "intend to put forward a plan that restores activity across the platform." But it offered no timeline for allowing withdrawals and other suspended transactions again.
Celsius was slamming its critics and claiming optimism about its future shortly before it suspended withdrawals. Celsius cofounder and CEO Alex Mashinsky blasted what he called "FUD and misinformation" in a tweet on June 11, asking a critic, "do you know even one person who has a problem withdrawing from Celsius?"
As the Financial Times notes, Celsius is the latest in "a wave of digital asset companies that have frozen assets and entered restructuring amid a sharp sell-off in cryptocurrencies this year." Crypto hedge fund Three Arrows Capital filed for bankruptcy on July 1, while crypto lender Voyager Digital filed for bankruptcy on July 6.