Celsius has apparently filed for Chapter 11 bankruptcy, with company attorneys beginning to notify individual state authorities in the United States as of Wednesday. According to reports, the firm intended to file Chapter 11 paperwork immediately. It comes only days after the beleaguered lending platform changed its prior law firm, Akin Gump Strauss Hauer & Feld LLP, with Kirkland & Ellis LLP, the same company that helped Voyager Digital file for bankruptcy last week. Earlier in the day, Celsius paid off the remainder of its decentralized financing (DeFi) obligations to Compound, Aave, and Maker, decreasing its initial debt of 820 million USD in only a month.
The fate of depositors whose assets are still locked up on the lending platform is still uncertain. Neither the firm nor its CEO, Alex Mashinsky, has publicly said if depositors would receive any portion of their monies returned. Vermont's Department of Financial Regulation (DFR) issued a warning against the problematic crypto loan startup, reminding customers that the company is not permitted to operate in the state. The DFR further declared that the firm is seriously insolvent and lacks assets and liquidity to meet its obligations to clients, accusing them of mismanaging customer cash by allocating them to riskier ventures.
Movement of Celsius coin since coming to the market. (Source: CoinMarketCap)
Sources:
https://coinmarketcap.com/currencies/celsius/
https://cointelegraph.com/news/breaking-celsius-is-reportedly-filing-for-bankruptcy-imminently