One of the biggest crypto lenders- Celsius has filed for bankruptcy. During the stir-up of the crypto industry due to the fall of TerraUSD, the crypto lender Celsius froze all its withdrawal operations. It was said by the company that action has been taken to cope with the growing instability in the market. Along with it, they also stated that this frozen phase would help them restructure. They gave the restricting as the reason for the freezing of withdrawal. The company stated that they aim to increase the valuation for the stakeholders. They also said that they have a $167 million reserve for meeting the immediate needs of the stakeholders.
The company said that this act decreased the pressure of paying the investors with inequality. With that withdrawal rate, some of the people who withdraw their assets initially would have received the complete valuation while the others would haven’t received anything for their assets. That’s why the company also took this measure in society’s welfare. They said this is the right decision for the community, which decreases the issues of sudden major stir-ups and collapse in the industry, which would have affected every single investor adversely. US regulations also allow this action under chapter 11. So they took legal action to keep their stakeholder’s investment safe.
The cryptocurrency expert company Voyager Digital filed for bankruptcy just the past week. Other companies like Coindex have also stopped their withdrawals. Such actions by the industry’s major companies cause speculations about some significant changes. Currently, these companies are undergoing a tough time. This has happened due to the decreased value of cryptocurrency currently in the market. That’s why the risk factor associated with these companies have also increased significantly. Cryptocurrency Bitcoin has also lost over half its value in just a few months.
