- According to the Wall Street Journal, Celsius has brought in advisors to help prepare for potential bankruptcy.
- Insiders say advisors to Alvarez & Marsal are helping the company file a potential bankruptcy.
- Celsius disabled withdrawals on 13 June and has given customers little guarantee that it will restore access to funds.
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Celsius is hiring consultants to prepare for potential bankruptcy, according to report wall street journal,
Celsius may file for bankruptcy
According to insiders in touch with, Celsius has brought in advisors from management consulting firm Alvarez & Marsal to help prepare for potential bankruptcy. wall street journal,
Specifically, the firm is said to have hired restructuring consultants to advise on a potential bankruptcy filing.
The news is not confirmed, as neither lvarez and Marsal nor Celsius have responded. WSJ,
The Wall Street Journal previously reported on June 14 that the company had hired restructuring lawyers from another law firm—Akin Gump Strauss Hauer & Feld LLP.
At the time, the WSJ said that Celsius’ lawyers would advise it on “potential solutions to its growing financial problems” and did not mention bankruptcy. However, other reports considered it implied that such advisors would advise on bankruptcy.
If Celsius files for bankruptcy, it is unclear whether users will be able to access their funds. Good luck June 14 reported that users may not be protected by deposit insurance. As such, clients may need to take legal action to receive compensation.
Celsius has triggered other freezes
Eleven days earlier, on June 13, Celsius halted withdrawals, transfers and swaps. The crypto lending company cited “extreme market conditions” as the reason for blocking access to funds.
Celsius has said little to the public since stopping the evacuation on 13 June. On Sunday, June 19, he suggested he was working to restore evacuees, but gave little guarantees.
The firm’s decision to stop withdrawals has also triggered a service freeze at other firms. Crypto lending service Babel Finance and crypto exchange Coinflex have both suspended withdrawals in the days following Celsius’ decision.
Meanwhile, DeFi service Bancor has halted its loss protection mechanism without restricting any withdrawals.
All of those companies cited harsh market conditions as the reason for the service suspension. The price of bitcoin fell to around $19,000 this week, a low not seen since December 2020.
Disclosure: At the time of writing, the author of this article owns BTC, ETH and other cryptocurrencies.