Celsius Network LLC, the cryptocurrency loan company has reportedly declared bankruptcy. Following the collapse of the popular algorithmic stablecoin TerraUSD as well as a drop in cryptocurrency prices, the crypto lending company has crumpled relatively quickly in the past few months.

Recently, Celsius halted its withdrawals and account transfers criticizing extreme market conditions due to which state securities regulators in Texas, Washington, and New Jersey intervened to investigate the choice made by the crypto lender.

The board of directors revealed that Celsius had issued for Chapter 11 protection. The company also made the difficult and essential choice of pausing withdrawals, swaps, and transfers on its platform to stabilize its operations and safeguard its customers before filing for bankruptcy.

Besides, customers who were first to act may have recovered their entire amount because of the acceleration of withdrawals. In contrast, others will have to wait for the cryptocurrency lender to recoup value from long-term asset deployment activities.

The US-based crypto lender company reported having USD 167 million in cash to fund some operations while the restructuring process was underway. However, on a consolidated basis, the firm has assessed its assets and liabilities to be between USD 1 billion and USD 10 billion.

Celsius claimed that it had filed court motions to be permitted to carry on its regular business operations as well as it was not currently requesting regulators to allow customer withdrawals. Meanwhile, disputes from customers would be handled via the Chapter 11 procedure.

In other developments, the IAMAI (Internet and Mobile Association of India) has reportedly decided to dismantle the BACC (Blockchain and Crypto Assets Council) amidst the ongoing regulatory bottlenecks in the crypto space. Sources claimed that the BACC will continue to operate as a separate entity as the IAMAI looks to distance itself from the crypto world.

Source Credit:

https://www.theguardian.com/technology/2022/jul/14/celsius-networks-cryptocurrency-lender-files-for-bankruptcy