Crypto Lender Celsius Files for Bankruptcy

Celsius Network, one of the world's largest cryptocurrency lenders, has filed for bankruptcy after freezing customers' assets.

The New Jersey-based start-up, which was valued at $3.25 billion, said in a bankruptcy filing in New York federal court that it had between $1 billion and $10 billion in assets and liabilities and more than 100,000 creditors. The start-up says the bankruptcy allows it to stabilise its business.

Celsius allowed users to deposit cryptocurrency and receive weekly interest payments. The platform offered users up to 18% interest per year.

Recent media investigations revealed that Celsius had partnered with unverified organisations to lend to large cryptocurrency companies. As demand for loans from institutional investors began to decline in 2021, Celsius took even greater risks. A few days before, Celsius blocked its customers' withdrawals and transfers. According to The Wall Street Journal, customer accounts are likely to remain frozen until at least the end of the bankruptcy process.

Celsius, whose sponsors included WestCap and the Caisse de dépôt et placement du Québec, which raised more than $850 million from investors, said it was not currently seeking authority to resume customer withdrawals.

According to the bankruptcy filing, Celsius has $167 million in cash to provide sufficient liquidity to support certain operations during the restructuring process.