Cryptocurrency Lending Company Celsius Finally Files for Bankruptcy Protection

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid ongoing turmoil in the cryptocurrency market, the U.S. cryptocurrency lending company Celsius filed for bankruptcy protection in a U.S. court on the 13th (local time). After the collapse of the Korean version of cryptocurrency TerraUST and Luna caused a significant drop in cryptocurrency prices, Celsius froze customer asset withdrawals to focus on securing liquidity but ultimately could not hold on and proceeded with bankruptcy proceedings.

According to Bloomberg and other sources, Celsius announced in a statement that it filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. Celsius explained that this was "a measure to maximize value for all shareholders" and said it would seek to stabilize its business through restructuring. Foreign media reported that since the end of last month, Celsius had hired consultants and law firms for restructuring and was preparing to file for bankruptcy.

Alex Mashinsky, CEO of Celsius, said, "This is the right decision for our community and company," adding, "Looking back at Celsius's history, I believe this moment will be seen as a time when we faced our community with determination and faith and strengthened the future of this company."

Celsius had secured about 1.7 million customers by offering an annual interest rate of over 18% for cryptocurrency deposits. However, as the cryptocurrency market recently shook, customers began withdrawing assets one after another, and to prevent this, Celsius abruptly froze withdrawals on the 12th of last month, further escalating market confusion. Cryptocurrency-related companies facing liquidity crises have been filing for bankruptcy one after another. Three Arrows Capital and Voyager Digital have also filed for bankruptcy protection.

This content was produced with the assistance of AI translation services.