Cryptocurrencies are in turmoil. They lose value and that causes victims. Once again, a virtual money lending platform has just gone bankrupt in the United States. Celsius was however one of the most important players in the sector.
Celsius is 1.7 million customers and several billion dollars at stake, now placed under the American bankruptcy regime.
Consequence of the plummeting of cryptocurrencies on a less favorable market, this creditor wanted to avoid the worst. He resorted to Chapter 11 of the bankruptcy law, a device that allows a company that can no longer repay its debt to have a kind of protection while it stabilizes.
However, Celsius customers will not be able to recover their money immediately since a freeze on withdrawals has been in place for more than a month.
Stoppage for cryptocurrencies
The funds are always blocked to avoid the rush of customers who would be panicked at the idea of losing the sum deposited. A behavior which, according to the company, would leave the least reactive on the floor without their due.
For the FinancialTimesthe company took risks, like offering high interest rates to attract investors, but at a time when no one wanted to buy cryptocurrency.
Celsius’ troubles are like those of other giants. End clap also for Three Arrows Capital, one of the most important investment funds, but also CoinFlex, Babel Finance, and very recently the specialist Voyager Digital also declared bankruptcy, for lack of sufficient liquidities.