CNBC report Wednesday night, Celsius notified: “Immediate state regulators to file for bankruptcy.” The company is struggling to deal with liquidity issues and is moving towards the bankruptcy of Chapter 11.
Early Thursday morning Celsius In fact, they announced that they had “initiated a voluntary Chapter 11 procedure.” In a press release, Celsius revealed that it only holds $ 167 million in cash used to “support operations.” Voluntary liquidation aims to give the company the following:
“Opportunity to complete a comprehensive restructuring transaction that stabilizes the business and maximizes the value of all stakeholders.”
Investors were given hope at the beginning of Wednesday as Celsius repaid all DeFi loans to the compound. Total debt will be reduced from hundreds of millions of dollars to zero dollars, providing approximately $ 200 million in collateral.
#Celsius Previously, we had most of our on-chain (DeFi) debt across these three positions (Maker wBTC Vault, Compound, and Aave).
Their Maker & Compound debt has been reduced to $ 0, and they are still borrowing ~ $ 70k worth of REN in their Aave position. 👇 pic.twitter.com/ipZGer2CuM
— Josh (@CryptoWorldJosh) July 13, 2022
Investors are worried that the money they want to repay is being used to repay their DeFi loan rather than their customers. Investors heard their voice on Twitter.
I wish I had never heard of it
— Justin Taylor (@TheSmarmyBum) July 14, 2022
Celsius co-founder and CEO Alex Mashinsky broke the silence with the release.
“This is the right decision for our community and company. We have a strong and experienced team in place to guide Celsius through this process.
Looking back on the history of Celsius, I am convinced that this is a decisive moment and that acting with determination and confidence has contributed to the community and strengthened the future of the company. “
The court approved “a request to pay employees and continue their interests without interruption” throughout the procedure. Celsius will continue to operate, but nothing has been announced when or when the withdrawal will be valid again.
