Celsius Faces Challenges After Bankruptcy Filing: Losses, Lawsuits, And Asset Transfers

In a significant turn of events, Celsius, the cryptocurrency loan company, filed for bankruptcy on July 13, 2022, after reporting a substantial $1.2 billion loss on its balance sheet.

Following this, a reorganization plan was adopted by creditors in September 2023, providing custodial account owners with 72.5% of their interests in Bitcoin and Ethereum.

However, challenges continued for Celsius as regulatory authorities, including the SEC, FTC, DOJ, and CFTC, filed lawsuits against the company and its CEO, Alex Mashinsky, alleging client fraud.

Recently, Celsius made an announcement stating its decision to cease staking large amounts of Ethereum (ETH) assets. This move raised eyebrows in the crypto community.

Celsius Notable Staked ETH Withdrawal To Monitor

In the past week, an address associated with Celsius Network, specifically labeled Celsius Network: Staked ETH, transferred a substantial 40,000 ETH to either Coinbase or FalconX, amounting to over $90 million. Notably, this address still holds 47,000 ETH, valued at more than $108 million.

As part of Celsius’s efforts to address financial challenges, customers who borrowed more than $100,000 in the 90-day period preceding the company’s bankruptcy are now required to reimburse a portion of their funds or potentially face legal actions.

Celsius plans to send letters to the relevant accounts, outlining instructions to pay back 27.5% of withdrawals made during the affected period.

These recent developments highlight the ongoing struggles and complexities Celsius is facing post-bankruptcy, further emphasizing the regulatory scrutiny and financial hurdles the cryptocurrency lending platform is navigating. 

The crypto community awaits further updates on how Celsius plans to navigate these challenges and regain stability in the industry.

Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.