U.S. crypto lender Celsius Network said it has filed for bankruptcy, becoming the latest victim in the cryptocurrency sector to wilt under a dramatic plunge in prices.
New Jersey-based Celsius listed estimated assets and liabilities on a consolidated basis in the range of $1 billion to $10 billion, according to a court filing in the U.S. Bankruptcy Court for Southern District of New York.
Crypto lenders boomed during the COVID-19 pandemic; drawing depositors with high-interest rates and easy access to loans rarely offered by traditional banks. They, however, tumbled in the recent months following a crash in cryptocurrency prices and the collapse of major token TerraUSD in May.
Another crypto lender Voyager Digital Ltd filed for bankruptcy on July 6 after suspending withdrawals and deposits.
Celsius is not requesting authority to allow customer withdrawals at this time. The company said in a press release. It has filed a series of customary motions with the court to allow it to continue operations in the normal course.
The company has $167 million in cash on hand; which will provide liquidity to support certain operations during the restructuring process.
Celsius froze withdrawals and transfers last month; citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets. This prompted state securities regulators in New Jersey, Texas, and Washington to investigate the decision.