The New Jersey-based crypto lender has a $1.2 billion hole in its balance sheet and will likely struggle to pay back its customers and creditors.
Liquidity-strapped crypto lender Celsius Network filed for Chapter 11 bankruptcy protection in the Southern District of New York on Wednesday, more than a month after it halted customer withdrawals because of “extreme market conditions.”
The filing came nine days after crypto broker Voyager Digital filed for Chapter 11 bankruptcy in the same court, after it paused customer withdrawals earlier this month as it faced its own liquidity crisis triggered by the collapse of Singapore-based crypto hedge fund Three Arrows Capital.
Court filings revealed that Celsius has a $1.2 billion hole (at minimum) in its balance sheet – the company has $5.5 billion in liabilities ($4.7 billion of which represents customer holdings) and only $4.3 billion in assets, much of which is illiquid. Though the company has already begun to make good on its debt to institutional creditors, retail investors have been left in the dark and will likely bear the brunt of Celsius’ failing.
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