Cryptocurrency lender Celsius has officially filed for bankruptcy, The Guardian reports.
The company unexpectedly froze withdrawals on June 14, triggering more panic in the cryptocurrency market due to very extreme market conditions. This led to a collapse in the value of the token.
As of now, the beleaguered firm has $167 million worth of cash on hand, which will allow it to operate during the restructuring process.
The Wall Street Journal reported that Celsius was facing bankruptcy in late June after the firm hired bankruptcy consultants from Alvarez & Marsal.
In early July, the company laid off a quarter of its workers as it was attempting to stave off bankruptcy.
Cryptocurrency exchange FTX reportedly passed on a deal to acquire Celsius due to the atrocious state of its finances.
As reported by U.Today, securities regulators from Texas and Alabama started investigating the embattled cryptocurrency lender.
The company, which was founded in 2017, had roughly $12 billion worth of assets under management as of May.
Last October, the company's valuation soared to $3 billion following a $750 Series B funding round.
Celsius is not the first high-profile company to file for bankruptcy protection during this brutal bearish cycle. Embattled hedge fund Three Arrows Capital also went belly-up due to the recent market crash, with the court freezing its assets. Crypto firm Voyager also filed for bankruptcy earlier this month.
While cryptocurrency prices plunged hard due to the unfavorable macro backdrop, the crypto crash was precipitated by the implosion of Terra, one of the most prominent blockchain projects.
Vladislav Sopov
Dan Burgin