U.S. crypto lender Celsius Network said it has filed for bankruptcy; becoming the latest victim in the cryptocurrency sector to wilt under a dramatic plunge in prices. New Jersey-based Celsius listed estimated assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion; according to a court filing in the U.S. Bankruptcy Court for Southern District of New York.
Crypto lenders boomed during the COVID-19 pandemic; drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. They, however, tumbled in the recent months following a crash in cryptocurrency prices and the collapse of major token TerraUSD.
Another crypto lender Voyager Digital Ltd had filed for bankruptcy after suspending withdrawals and deposits. Celsius is not requesting authority to allow customer withdrawals at this time, the company said in a press release; adding that it has filed a series of customary motions with the court to allow it to continue operations in the normal course.
The company has $167 million in cash on hand, which will provide liquidity to support certain operations during the restructuring process. Celsius froze withdrawals and transfers last month; citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets. This prompted state securities regulators in New Jersey, Texas and Washington to investigate the decision.