In a desperate attempt to pull back the crypto lending company from the brink of bankruptcy, Celsius is hiring more advisers. It has hired restructuring advisers from Alvarez & Marsal to help prepare the company for an upcoming filing. 12 days ago, Celsius abruptly froze its clients’ accounts and suspended all withdrawals and swaps, as well as transfers.
Celsius took this drastic action to overcome the liquidity crisis as the crypto market plunged deeper following stablecoin UST’s collapse. The crypto lending company cited extreme market conditions. It has offered its customers next to nothing in terms of a way forward. Last week, Celsius sought assistance from Akin Grump Strauss Hauer & Feld LLP – a law firm – for its financial restructuring.
Alex Mashinsky, Celsius CEO, had earlier brushed off rumors that the company was heading towards insolvency. He took to Twitter, three days later, to acknowledge the situation. Mashinsky revealed that Celsius is going through difficult times and urged its users for patience and support.
Celsius’s plight also has authorities taking notice. The Texas State Securities Board director of the enforcement division, Joseph Rotunda on June 16 said regulators in various states – Alabama, New Jersey, Kentucky, Washington, and Texas, were looking into the issue.
Simon Dixon, Celsius investor and BnkToTheFuture co-founder, has a recovery plan. It recommends taking a similar approach as Bitfinex had done in 2016 through a financial innovation solution.