Celsius will soon declare bankruptcy
Leaked information from unnamed sources suggests that lending platform Celsius will soon file for bankruptcy.
To Report Cointelegraph, the Celsius lending platform, plans to file for Chapter 11 bankruptcy, and for this purpose, the company’s lawyers have sent the necessary information to state officials on Wednesday, July 13 (July 22).
Chapter 11 bankruptcy is a legal process in which a business may file for bankruptcy but continue to operate under certain controls.
An anonymous source, who wishes to remain anonymous, told CNBC the news. According to this media, the lawyers of this platform intend to immediately file their bankruptcy documents under Chapter 11.
It was just a few days ago that this lending platform transferred its law firm from Akin Gump Strauss Hauer & Feld to Kirkland & Ellis, which joined Voyager last week. Voyager Digital had helped file for bankruptcy.
This morning, Celsius paid the last of its DeFi debts to Aave, Compound, and Maker platforms, reducing its initial debt of $820 million to $0.013 within a month.
However, the fate of depositors whose assets are still locked up on the platform is still unclear. Neither the company nor its CEO, Alex Mashinsky, had any comment on whether depositors would get a percentage of their funds back.
On Tuesday, the Vermont Department of Financial Regulation (DFR) issued a warning against the company, reminding users that the company is not licensed to provide its services in the state.
The Vermont Department of Financial Regulation also announced that they considered the Celsius platform to be fully insolvent; Because it does not have the necessary assets and liquidity to fulfill its obligations to customers. The state also accused the managers of this platform of mismanaging clients’ funds and allocating their assets in risky investments.
Following Alabama, Kentucky, New Jersey, Texas, and Washington, Vermont is the sixth US state to launch an investigation into Celsius digital currency interest rate accounts.
Also read: Investing, profit cultivation and liquidity extraction; Three popular methods of earning profit in DeFi
It was on June 13 (23 June) last month that for the first time, after this digital currency lending platform was forced to stop withdrawing users due to difficult market conditions, rumors about its bankruptcy were heard.