Crypto platform Celsius filed for bankruptcy after freezing customer funds

Until bankruptcy proceedings are over, assets will likely not be returned to users, according to the WSJ.

“The filing follows Celsius’ difficult but necessary decision last month to suspend withdrawals, transfers between accounts and cryptocurrency exchanges to stabilize business and protect customers,” – the company said.

Celsius CEO Alexei Mashinsky said it was “the right decision” for both the company and users.

According to the bankruptcy filing, Celsius has between $1 billion and $10 billion in assets, the same amount in liabilities, and more than 100,000 customers. The company has $167 million in cash to “provide sufficient liquidity to support certain operations during the restructuring process.”

According to The Wall Street Journal, customer accounts will likely remain frozen at least until the bankruptcy process is complete.

On June 13, Celsius temporarily banned users from transferring and withdrawing funds because of “extreme market conditions.” In the bankruptcy filing, the company explained that if it had not done so, it would have faced a massive withdrawal of deposits: those who would have had time to withdraw assets first would have received all the payouts, while the rest would have had to wait.


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