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New
Jersey-based Celsius froze withdrawals last month, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
In a court filing at the U.S. Bankruptcy Court for Southern
District of New York, Celsius estimated its assets and
liabilities as between $1 billion to $10 billion, with more than
100,000 creditors. The company has $167 million in cash on hand.
"This is the right decision for our community and company," said
Celsius co-founder and Chief Executive Alex Mashinsky.
Crypto lenders such as Celsius boomed during the COVID-19
pandemic, drawing depositors with high interest rates and easy
access to loans rarely offered by traditional banks. They lent
out tokens to mostly institutional investors, making a profit
from the difference.
But the lenders' business model came under scrutiny after a
sharp sell-off in the crypto market spurred by the collapse of
major tokens terraUSD and luna in May.
Another U.S. crypto lender, Voyager Digital Ltd, filed for
bankruptcy this month after suspending withdrawals and deposits.
Singapore's Vauld, a smaller lender, also froze withdrawals this
month.
Celsius said in a statement it was not requesting authority to
allow customer withdrawals, adding it had asked the court to
allow it to continue operations such as paying employees.
Celsius's move in June to freeze withdrawals prompted state
securities regulators in New Jersey, Texas and Washington to
launch investigations into the firms.
(Reporting by Maria Ponnezhath in Bengaluru; Editing by Sherry
Jacob-Phillips and Edmund Blair)
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