Larger crypto bank declares bankruptcy – ICT news

One of the leading cryptocurrency platforms, Celsius Network, has filed for bankruptcy. It thus mimics a whole host of other companies that did not survive the cryptocurrency crash.

Celsius Network, a start-up from the US state of New Jersey, is one of the leading cryptocurrency lending platforms. It has just declared bankruptcy, a month after the freezing of its assets ‘due to extreme market conditions’.

Celsius is in principle a bank for cryptocurrencies. It allowed users to deposit their bitcoins, ethereums and tethers on the platform and in return paid them weekly interest rates of up to 18 percent in some cases. But the company ran into trouble when the cryptocurrency market crashed a few weeks ago. The value of currencies like bitcoin, which nevertheless already followed a very volatile course, has actually fallen over the last eight months from around 60,000 euros to below 20,000 euros, especially after the implosion of the TerraUSD cryptocurrency in May. In response, Celsius froze its accounts, making it impossible for users to withdraw cash.

Protection

The measure caused panic among users and raised doubts about Celsius’ reserves and / or whether it was able to return its money to anyone. The company is valued by investors at $ 3.25 billion after two rounds of financing and reportedly has about 1.7 million users. It also has $ 1 to $ 10 billion in financial resources, according to the case filed in court, and more than 100,000 creditors. By declaring bankruptcy, Celsius Network hopes to obtain protection from these creditors in order to stabilize its business.

A study conducted by various media, including the Financial Times, already reveals that Celsius is at high risk in terms of loans and investments. With its downfall, Celsius now ends up on a mini-list of other key crypto companies that in recent months have had to admit defeat in light of the crash of this market. The investment fund Three Arrows Capital, which focuses on crypto companies, filed for bankruptcy earlier this month, as did the platforms Luna and Voyager Digital.

Celsius Network, a start-up from the US state of New Jersey, is one of the leading cryptocurrency lending platforms. It has just declared bankruptcy, a month after freezing its assets ‘due to extreme market conditions’. Celsius is in principle a bank for cryptocurrencies. It allowed users to deposit their bitcoins, ethereums and tethers on the platform and in return paid them weekly interest rates of up to 18 percent in some cases. But the company ran into trouble when the cryptocurrency market crashed a few weeks ago. The value of currencies like bitcoin, which nevertheless already followed a very volatile course, has actually fallen over the last eight months from around 60,000 euros to below 20,000 euros, especially after the implosion of the TerraUSD cryptocurrency in May. In response, Celsius froze its accounts, making it impossible for users to withdraw their cash, even returning their money to everyone. The company is valued by investors at $ 3.25 billion after two rounds of financing and reportedly has about 1.7 million users. It also has $ 1 to $ 10 billion in financial resources, according to the case filed in court, and more than 100,000 creditors. By declaring bankruptcy, Celsius Network hopes to obtain protection from these creditors in order to stabilize its investments. With its downfall, Celsius now ends up on a mini-list of other key crypto companies that in recent months have had to admit defeat in light of the crash of this market. The investment fund Three Arrows Capital, which focuses on crypto companies, filed for bankruptcy earlier this month, as did the platforms Luna and Voyager Digital.

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