Celsius Initiates Financial Restructuring To Stabilize Its Business

Celsius Network, the crypto lender battling a liquidity crisis, has ultimately filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on Wednesday evening, July 13, 2022.

This move allows the company to stabilize its business and complete a restructuring transaction that maximizes value for all stakeholders. Celsius and its subsidiaries filed bankruptcy protection to implement the restructuring with case numbers 22-10964, 22-10965, and up to 22-10971.

The company’s subsidiaries include Celsius KeyFi LLC, Celsius Mining LLC, Celsius Networks Lending LLC, and Celsius US Holding LLC.

Members of the Committee of the Board of Directors said the bankruptcy filing “follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers.”

The committee further explained that not halting withdrawals last month would have granted some customers an unfair advantage of receiving in full while leaving others hanging.

The CEO, Alex Mashinsky, added:

This is the right decision for our community and company. We have a strong and experienced team to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the company’s future.

In their coffers is $167 million in cash to provide ample liquidity to support the restructuring process.

Additionally, Celsius filed with the court a series of customary motions to allow them to operate in the normal course and pay employees their benefits without disruption. However, Celsius is not seeking authority to allow customer withdrawals.