Crypto Lending Platform, Celsius, Files For Bankruptcy
The embattled crypto lending platform, Celsius has filed for a voluntary Chapter 11 bankruptcy.
The filing was made in the U.S. Bankruptcy Court for the Southern District in New York.
This move seeks to provide Celsius with the avenue to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.
Based on the details contained in the court filing, Celsius listed estimated assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion.
Reports also indicate that Celsius had repaid its remaining debt to Compound, to the tune of $50 million, thereby freeing about $200 million of pledged collateral.
Celsius was also able to reclaim 10,000 wrapped Bitcoin tokens.
“Etherscan data shows that a wallet in connection with Celsius transferred 50 million DAI tokens to Compound in two instances. Following the down payments, Compound released 6,900, then 3,100 wBTC tokens to Celsius. The wBTC tokens had been locked up on the protocol as collateral.
“Finally, 10,000 wBTC was transferred by Celsius to an unlabeled wallet address where the firm’s 416,000 stETH stake – some $435 million at current prices – ended up the day before” a report by Blockchain News said.
Celsius said late on Wednesday that it has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.
Confirming the development, the CEO and Co-founder of Celsius, Alex Mashinsky, described this as a decision in the right direction.
“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,” he said.
Last month, Celsius froze withdrawals, citing extreme market conditions.
Following this decision, a web3 Investment firm, and Celsius Lead investor, Bnk To The Future had solicited to come up with a recovery plan for Celsius.
Bnk To The Future had led the first investment round for Celsius and according to its founder, Simon Dixon, was also open to any potential insolvency that might occur.