- Celsius Network filed voluntary petitions for Chapter 11 protection.
- The decision was followed by the company’s decision last month to halt withdrawals, swaps, and transfers on its platform.
- The lending firm plans to provide a plan to restore activities via its platform, while restructuring its obligations.
Celsius Network, a Cryptocurrency lending company, confirmed that they’ve filed voluntary petitions for Chapter 11 bankruptcy in the US Bankruptcy Court of Southern District of New York amid Multistate investigations and legal charges.
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The US bankruptcy code 11 or Chapter 11 is a bankruptcy filed by corporations that allows companies to operate while restructuring their financial obligations.
The lending company said that the interest of their stakeholders and its entire community was their top priority, that’s why the firm filed the petition. Celsius will instigate financial restructuring to stabilize its business and strengthen the value of all stake stakeholders.
On June 12, the lending company decided to halt withdrawals, swaps, and transfers from its platform. However, more than a month has passed, these options have remained paused.
The company will stop providing rewards to its users. Furthermore, Celsius did not request authorities to allow customers withdraw as of date.
According to Celsius, the customers must expect a plan, where the company restores activities across its platform, return value to customers, and provide them choices. Celsius affiliated loans will remain serviced. This means that maturity dates, margin calls, and interest payments will proceed as they have in the past.
Celsius has $167 million cash on hand, the company claims that this amount will be sufficient to support the operations during the restructuring process. The firm promised to share the progress their action has made, as they plan to go through this transparent process.
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