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Bankrupt cryptocurrency lender Celsius is getting conscious of its users and future operations. Celsius filed for bankruptcy in July after a long battle resolving issues, leaving the once top crypto lending firm with nearly $3 billion in liabilities. Being at the chapter 11 bankruptcy proceedings, Celsius has requested the court to sell its holdings of stablecoin to fund its operations by earning liquidity, according to new court filings.
Celsius In Extreme Fear
Celsius is getting woes about the uncertainty of its future operations and dominance in the crypto market. The users of the lending platform are not even sure whether they will see their crypto that is locked in the platform.
Celsius was established in 2017 and became one of the first and largest cryptocurrency platforms where users could deposit their owned crypto assets to generate rewards or get loans using their assets as collateral. Celsius has attracted more than 1.7 million registered users and nearly 300K active users, with its 18% interest rate.
At our hearing today and throughout our case, Celsius continues to engage with the Unsecured Creditors Committee and U.S. Trustee to make meaningful progress on our efforts to maximize value for all customers and ensure transparency in our case.
— Celsius (@CelsiusNetwork) September 15, 2022
Celsius currently has eleven different forms of stablecoin, whose value is nearly $23 million. The stablecoin is owned by Debtor Celsius Network Limited (UK), Debtor Celsius Network LLC (US), and non-Debtor Celsius Network EU UAB (LT).
The court filing stated, “The Debtors, however, continue to own stablecoins that should be monetized to fund their operations in these Chapter 11 cases given their market stability compared to other types of cryptocurrencies.”
Restore Celsius’ Reputation
The CEO of Celsius network, Alex Mashinsky, believes that the selling of stablecoin will help the firm to begin its business in a proper way. If the presiding Judge Martin Glenn, the Chief U.S. bankruptcy judge, approves the filings, then the selling amount of stablecoin would initially be used for paying for the operations in the Celsius network.
In addition, the selling amount would also be used to pay back the Debtors’ estate, a part of Celsius’ bankruptcy process. Recently, Celsius’ bankruptcy judge gave permission to conduct an independent examination of the crypto lending firm.
The failure of the revolutionizing crypto lending firm Celsius became one of the main reasons behind the crypto market crash. Alex Mashinsky held a meeting with Celsius’ staff on 8 September to rebuild the firm in a new way. Celsius now wants to offer custodial services to users, and it needs to build trust in the crypto market to regain its position.