Celsius is up next on the bankruptcy chopping block as the liquidated crypto firm goes belly up as they file for Chapter 11 bankruptcy in a New York court on July 13, 2022!
The follow along with Voyager and Three Arrows Capital to become the next official victim in the battle against over leveraged, centralized crypto lending firms. The mishandling of customer funds and giving over leveraged loads to companies like 3AC hit them hard. They were the first company in this string of incidents to halt customer withdrawals, which spawned a sort of ‘run on the crypto banks’.
According to the court filing , Celsius and all of its subsidiaries have filled for chapter 11 restructuring.
With the Chapter 11 filing, Celsius is attempting to continue to operate.
According to Businesswire, “Celsius has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.”
They also go on to state:
“To ensure a smooth transition into Chapter 11, Celsius has filed with the Court a series of customary motions to allow the Company to continue to operate in the normal course. These “first day” motions include requests to pay employees and continue their benefits without disruption, for which the Company expects to receive Court approval. Celsius is not requesting authority to allow customer withdrawals at this time. Customer claims will be addressed through the Chapter 11 process.”
What Is A Chapter 11 Bankruptcy?
According to the definition from the US Courts website: “This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.”
Basically it is an effort for companies to try and come up with some sort of plan to stay in operation while trying to work out a deal with the creditors. This is different from an out right bankruptcy. This is the same chapter filing that Voyager also filed. 3AC filed a Chapter 15 which basically wipes them clean of their debt obligations. Basically they get to cut and run.
The Statement Stands…
Not Your Keys, Not Your Cheese!!! The whole point of cryptocurrency is to be your own bank. Not fall into the same traps as the traditional system. Don’t get me wrong, I used to use Nexo and BlockFi, but saw these kind of issues coming and cut bait and ran full on into DEFI protocols that did the same thing, but I still had control of my money! Be safe where you put your investments, make sure to do your own research on any place or protocol you want to put value!
Nothing said is financial advise.
This is for educational and recreational purposes only!
Stay safe in these volatile markets and don’t get rekt!
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