Celsius a crypto lending firm has hired a second group of legal consultants in case of a possible bankruptcy
Advisors To Aid Celsius Bankruptcy Plan
According to claims from the Wall Street Journal, Celsius is employing advisors to get ready for a potential bankruptcy.
According to individuals in touch with the Wall Street Journal, Celsius has hired advisors from the management advice company Alvarez & Marsal to aid with its bankruptcy planning.
The company allegedly recruited restructuring specialists to offer guidance on a prospective bankruptcy filing.
Since Alvarez & Marsal and Celsius did not comment to the Wall Street Journal, the report has not been verified.
Restructuring Lawyers Hired
On June 14, The Wall Street Journal reported that the corporation had recruited restructuring lawyers from Akin Gump Strauss Hauer & Feld LLP.
At the time, the WSJ did not mention bankruptcy and instead stated that Celsius’ lawyers will advise it on “potential solutions for its escalating financial woes.” Other publications, however, assumed that such experts would provide bankruptcy advice implicitly.
It’s uncertain whether users will have access to their money if Celsius declares bankruptcy. Users might not be covered by deposit insurance, according to a June 14 Fortune article. Therefore, in order to receive compensation, clients might have to file a lawsuit.
Withdrawals, transfers, and swaps were put on hold on June 13 (11 days ago), Celsius. The cryptocurrency lending business attributed the restriction of money to “extreme market conditions.”
Services Freeze
Since it stopped withdrawals on June 13, Celsius has not made many public statements. On Sunday, June 19, it made a suggestion that it was trying to get withdrawals back but offered little assurances.
Other firms’ services have been frozen as a result of the company’s decision to cease withdrawals. In the days following the decision, withdrawals have been halted by the cryptocurrency loan platform Babel Finance and the cryptocurrency exchange CoinFLEX.
Bancor, a DeFi service, has suspended its loss prevention system without limiting any withdrawals.
All of those businesses cited difficult market conditions as the cause of service suspensions. This week saw a dip in bitcoin prices to about $19,000, the lowest level since December 2020.
