Last night around 2:30 am, the Celsius Network announced it was going begin a process of financial restructuring. It aims to help the company remain stable and maximize value for all stakeholders. The CeFi platform, the most prominent in the crypto ecosystem, announced this decision through an official statement.
Reorganize its activity in the bankruptcy procedure?
Celsius Network said today that it has begun Chapter 11 bankruptcy proceedings. The company wants to use this process to reorganize its activity and stabilize its operations. Although the request is voluntary, customer withdrawals will not be allowed. Therefore, customer and creditor money will remain frozen on the centralized financial platform for now.
“Today’s confrontation follows Celsius’ difficult but necessary decision last month to pause withdrawals, trading and transfers on its platform in order to stabilize its business and protect its customers. Without a pause, accelerating withdrawals will allow some customers – the first movers – to be paid in full while leaving others to wait for Celsius to reap value from asset deployment activities . illiquid or longer period before receiving a recovery. indicated the members of the special committee of the board of directors.
In addition, customer complaints will still be dealt with under this procedure. However, it is difficult to understand the interest of this service when the majority of users only want to recover their cryptocurrencies.
Liquidity to maintain certain operations
Celsius recently received $15 million from the Aave protocol in exchange for 400,000 stETH. This cash allows Celsius to mitigate its risk and avoid liquidating certain assets such as Bitcoin in the event of high volatility. Currently, Celsius Network has $167 million in cash. While this will not cover all user withdrawals, it will allow certain operations to be maintained during the restructuring process.
“This is the right decision for our community and our business. We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at Celsius’ history, we will see it as a watershed moment, where acting with determination and confidence served the community and strengthened the company’s future. said Alex Mashinsky, co-founder and CEO of Celsius
Some will be happy to know that bankruptcy and liquidation of Celsius seems to have been averted for now. Others, on the other hand, wonder if they will have to wait eight years to recover some bitcoin crumbs, as happened with MtGox.
Source: The Blog
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