Bankrupt Cryptocurrency Lender Celsius Needs More Time for Reorganization Plan

Celsius is a cryptocurrency lender platform that filed for bankruptcy a while ago. Recently, the destitute cryptocurrency firm has applied with the US courts to extend the allotted time duration. As per Celsius representatives, the firm needs a time extension to upgrade its reorganization plan.

As Celsius is going through bankruptcy proceedings it has frozen all the funds under its custody. According to careful estimations, Celsius has had billions of dollars in customer deposits since June, when the firm first filed for bankruptcy.

Celsius filed for bankruptcy under the Chapter 11 code in the Southern District of New York. It meant that the firm was granted an initial period of exclusivity spanning over 4 months. The cryptocurrency lender was to use this time to develop a workable reorganization plan.

In the same vein, there have been several civil litigation attempts made by the credits with a claim of $5.5 billion in outstanding debts. The period of exclusivity has now ended and Celsius has appealed for an extension from the court.

To make this work, Celsius management needs to file a standalone report which may include the sales of its assets.

Reorganization Process

A recent public statement has been issued by Celsius. The statement reads that the firm is determined to carry on its value-maximizing motto in the future.

At the same time, the firm has maintained that the work they are doing is complex, and to ensure the interest of all stakeholders the management of Celsius wishes to carry out the results with relative precision.

Celsius is not an outstanding case under the current economic backdrop. The firm has only joined the ranks of some other financial enterprises undergoing insolvency proceedings.

Some of these bereft firms are FTX, Alameda Research, Three Arrow Capital, Vauld, Zipmex, Babel Finance, and Voyager. However, on the other end, big corporations are coming forward to take up major stakes in cryptocurrency organizations such as the case of Ark Invest and Coinbase.

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