Cryptocurrency firm Celsius files for bankruptcy

The US-based business has said it will use the $167m it has cash in hand to provide ample liquidity to support certain operations during the restructuring process. In addition to this, it has filed with the court a series of customary motions to allow the company to continue to operate in the normal course. 

These “first day” motions include requests to pay employees to receive court approval. It is not, however, requesting authority to allow customer withdrawals at this time. 

This announcement comes after its decision to put a pause on withdrawals, swaps and transfers in order to “stabilise the business” and protect its customers. 

A statement from the members of the special committee on the board of directors added: “Without a pause, the acceleration of withdrawals would have allowed certain customers - those who were first to act - to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.”

Commenting on the decision to file for bankruptcy, the firm’s co-founder and chief executive Alex Mashinsky said: “This is the right decision for our community and company. We have a strong and experienced team in place to lead Celsius through this process. 

“I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.” 

Kirkland & Ellis is serving as legal counsel for Celsius during this process, while Centerview Partners will operate as a financial advisor and Alvarez & Marsal as a restructuring advisor.