Top Crypto News: Crypto Lender Celsius Network Declared Bankruptcy after DeFi Payoffs

The news about Celsius holding off on their withdrawals was a shocker to the whole of the crypto community. However, the bear market rally followed by the LUNA crash caused a certain FOMO in the market and many investors started to liquidate their assets. During this time, the crypto lending giant published a notice regarding the withdrawal of assets. 

What is happening to Celsius Network Now?

According to a CNBC report on Wednesday, Celsius has informed: “state regulators that it’s filing for bankruptcy ‘imminently.” Today, Cryptoslste reported that the company has actually “initiated voluntary Chapter 11 proceedings.” Celsius revealed in the press release that it only holds $167 million in cash, which will be used to “support operations.” The voluntary liquidation aims to give the company: “the opportunity to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.”

On Wednesday, the investors had lost hope as the company has paid up all of its DeFi loans, totaling an amount of $ 200 million in collateral. 

🚨 JUST IN: #Celsius has now paid off ALL of their on-chain (DeFi) stablecoin debt.

Their total on-chain (DeFi) debt has gone from over ~$820 million just last month, to now ~$70k.

— Josh (@CryptoWorldJosh) July 13, 2022

Alex Mashinsky, Co-Founder & CEO of Celsius, broke his silence in the release stating;

“This is the right decision for our community and company. We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”

Source: Cryptoslate

What is Celsius Network?

Celsius is one of the biggest crypto lending platforms built with the vision that financial services should be focusing in doing what is in the best interest of the customers and the community. The blockchain-based platform was working towards providing the members with access to curated financial services that are not available through traditional financial institutions. 

Founded in 2017, Celsius is one of the biggest crypto lending platforms in the world. The Celsius Networks LLC caters to the vision of financial freedom. Their platform had been working toward providing investors with fair yield, zero fees, and lightning-quick transactions via crypto. 

To put it simply, Celsius Network is a democratized interest income and lending platform built on the belief that financial services should work towards solutions that are in the best interests of the community. Within the Celsius platform, crypto holders can earn interest by transferring their coins to their Celsius Wallet and borrowing USD against their crypto collateral at interest rates as low as 4.95% APR, as mentioned in the Celsius blog.

Additional Read: Best Penny Cryptos 2022

WHAT HAPPENED TO CELSIUS NETWORK?

Celsius is one of the biggest crypto lending platforms in the world which claimed to hold assets worth $20 billion according to PRNewswire. The memo addressing the Celsius community stated, ‘ We understand that this news is difficult, but we believe that our decision to pause withdrawals, Swap, and transfers between accounts is the most responsible action we can take to protect our community. We are working with a singular focus: to protect and preserve assets to meet our obligations to customers. Our ultimate objective is stabilizing liquidity and restoring withdrawals, Swap, and transfers between accounts as quickly as possible. There is a lot of work ahead as we consider various options, this process will take time, and there may be delays.’

Valued at $3.25 billion after extending its “oversubscribed” Series B financing round to $750 million in November, Celsius allows its users to deposit their tokens; Bitcoin, Ethereum and Tether; and receive weekly interest payments. Celsius has also offered to pay interest which can go as high as 18% a year to customers who will transfer their tokens to the platform, according to Reuters. 

Read in detail about Crypto Lender Celsius Network here.