The U.S. company Celsius Network, which specialises in crypto loans, said on Wednesday that it has filed for financial protection. This makes it the latest digital currency company to fail because of a huge drop in prices.
A court document from the U.S. Insolvency Court for the Southern District of New York says that New Jersey-based Celsius recorded assessed assets and liabilities on a merged basis in the range of $1 billion to $10 billion.
During the COVID-19 pandemic, crypto moneylenders grew quickly, attracting investors with high interest rates and easy access to loans that traditional banks rarely offer.
They did, however, fall in the following months after a crash in the prices of cryptocurrencies and the breakup of a major token, TerraUSD, in May.
Voyager Digital Ltd. (VOYG.TO) announced on July 6 that it was out of money after it stopped letting people withdraw and store money.
Celsius isn’t talking about being able to let customers withdraw money right now, the company said in a public statement on Wednesday. It also said that it has filed a series of normal steps with the court to be able to keep doing business as usual.
The organisation has $167 million in real money on hand, which can be used to help with certain tasks while the system is being rebuilt.
Last month, Celsius stopped withdrawals and transfers, saying that the economy was “outrageous.” This made it impossible for 1.7 million clients to get their money back.
This made people in charge of state protection in New Jersey, Texas, and Washington look into the choice.
