Officially, “Celsius” company begins bankruptcy procedures, and the digital currency CEL is negatively affected!
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Answer Officially, “Celsius” company begins bankruptcy procedures, and the digital currency CEL is negatively affected!
Celsius Corporation today announced that it has begun voluntary Chapter 11 bankruptcy protection with the Southern District of New York.
As a result, CEL cryptocurrency recorded a decline of more than 50% in a daily candle, plunging and reaching its lowest monthly level.
According to Celsius, the need for bankruptcy protection will help it in the restructuring process.
Alex Mashinsky, Co-founder and CEO of Celsius, said:
This is the right decision for our community and our company.
We have a strong and experienced team to lead Celsius through this crisis.
I am confident that when we look back at Celsius’ history, we will see this as a defining moment, as working with resolve and trust serves the community and enhances the future of the company.
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Celsius is struggling to survive the sinking:
Celsius has been struggling with a liquidity crunch since June 13, 2022, when the company temporarily suspended all withdrawals, exchanges and transfers between accounts.
In the past few weeks, the company has paid off some debt to unlock user funds in various lending protocols, including AAVE and Compound.
While Celsius continues its restructuring process, several global jurisdictions led by several counties in the United States are investigating.
Recently, Joseph Rotunda, executive director of the Texas State Securities Board, commented on Celsius’ bankruptcy filing by saying:
Unfortunately, this was to be expected.
It was expected however, it does not stop our investigations.
We will continue to investigate the company and work to protect its customers, even while it goes bankrupt.
How long will Celsius users’ funds be withheld?
Speaking to CNBC, Adam Levitin, a law professor at Georgetown University and director of Jordan Crypto Advisors, told CNBC that Celsius clients may have to wait years before accessing their money.
He added that more crypto-related companies are likely to follow the same path as Celsius in the near future.
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Levitin concluded by saying:
The tide is still ebbing, we’re just waiting to see how far it will go.
Celsius reportedly has $167 million in cash on hand to help with the restructuring process.
It should be noted that Kirkland & Ellis LLP acts as a legal advisor.
In addition, Centerview Partners acts as a financial advisor, while Alvarez & Marsal acts as a restructuring advisor to the lender.
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