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Celsius Network, a reputable cryptocurrency lender, has reportedly hired restructuring attorneys. The attorneys from the Akin Gump Strauss Hauer & Feld LLP will assist the company with its current financial wrangles.
Celsius hires restructuring attorneys
The problems with the Celsius Network intensified Sunday night after the company announced halting several functionalities, including withdrawals. The company said that the decision was influenced by extreme market conditions.
The WSJ report said that the company was looking for all possible financial options from investors. However, it added that it would not rule out the other financing alternatives, such as financial restructuring.
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The Celsius Network currently has a valuation of $3.5 billion. The company arrived at this valuation after raising $750 million from a Series B funding round in November last year. After announcing it would halt withdrawals, the company sent shock waves across a market still dented by the Terra Luna collapse.
Before halting its operations, Celsius claimed that its user base was at a vast 1.7 million users, while the yields came in at up to 18% on deposits. The firm’s website on May 17, 2022, also portrayed $11.8 billion in assets under management.
The bear market seems to be stressing the decentralized finance (DeFi) sector. DeFi projects seem to be taking a massive hit because of this crash. Moreover, the collapse of Terra and now Celsius has squeezed liquidity from yield platforms, as investors fear for their funds.
Celsius talks about halting withdrawals
Withdrawals on the Celsius network have been halted for 48 hours now. The company took to Twitter on Tuesday to reassure the community that it was working to ensure everything went back to normal.
“[Celsius Network] is working as quickly as possible and will share information as and when it becomes appropriate. Acting in the interest of our community remains our top priority,” the company said.
After the company’s tweet on Sunday, the CEL token plunged to lows of around $0.31. Despite most of the market trading in the red, it was one of the worst-performing tokens on that day. Within an hour of halting withdrawals, the token had dropped by around 70%.
However, after the company broke its silence on Tuesday, CEL rallied to above $1 again. However, it failed to sustain these levels and plunged again. At the time of writing, CEL was trading at $0.645, up by almost 100% in the past 24 hours.
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