Cryptocurrency lending platform Celsius has halted withdrawals and transfers since June 12 and informed the Celsius Network members that the “procedure will take time.” Celsius customers have been questioning why they still receive weekly prizes since the halt. The firm’s management has apparently been battling with its attorneys over whether the company should file for Chapter 11 bankruptcy.
However, most Celsius stories these days cite “people familiar with the matter,” and these sources cannot be verified.
Chapter 11 bankruptcy is one of the most expensive types of bankruptcy. A court will assist a firm in restructuring its debt and liabilities while it continues to function under this official framework.
Celsius Network is now seeking its users’ support to save it from bankruptcy. It wants to demonstrate that most consumers would prefer the firm avoid bankruptcy entirely in order to win an internal battle with its attorneys.
Users can apparently show their support by enabling “HODL Mode” on their Celsius accounts, a security feature for clients who do not want to withdraw or move funds for an extended period.
The Wall Street Journal (WSJ) revealed last week that the corporation sought restructuring guidance from the consulting firm Alvarez & Marsal. Following that, another source said that Goldman Sachs was interested in acquiring distressed assets from the business “at potentially big discounts in the event of a bankruptcy filing.”
Celsius’ CEL coin is currently worth roughly $0.74, having lost half of its value in the last week, according to Blockworks Research statistics. CEL fell to $0.24 shortly after it halted withdrawals, roughly 97% below its one-year peak of $8.05.
The corporation is believed to be unable to openly disclose its position on the matter due to legalities. CEO Alex Mashinsky, who is currently in the United States, is also unable to comment on the company’s position.
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