Cryptocurrency lender Celsius Network Ltd. filed for Chapter 11 bankruptcy, the latest casualty of a $2 trillion crash that has wiped out some of the industry’s biggest names and exposed hundreds of thousands of individual investors to steep losses.
We can again see the cross-leverage between large crypro-firms, how individuals are at the end of the unsecured creditor queue, and that many will lose their shirts in the largely unregulated and speculative market.
Celsius, which has more than 100,000 creditors, said it took the step to stabilize its business and work out a restructuring for all stakeholders. The filing was made in the Southern District of New York and listed Alameda Research, the trading firm co-founded by crypto billionaire Sam Bankman-Fried, among major creditors.
The platform held about $4.3 billion of assets against $5.5 billion of liabilities as of Wednesday, according to court papers. The company has been trying to obtain new financing from third parties.
Celsius invested about $500 million in Celsius Mining and even prepared it for an initial public offering in May.
“The Mining Center is an essential driver of growth in the debtors’ business and will allow the debtors to expand and more profitably mine Bitcoin.” according to the filing.
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