thanks, Financial Times).
Throughout the process, the company will service existing loans though not issue any new ones. Withdrawals from the platform remain suspended, and “most account activity will be paused until further notice.”
In an industry built on bravado it is perhaps unsurprising that the filing, which is the statement of Celsius co-founder and CEO Alex Mashinsky, has an element of defiance, which at times almost verges into farce. It blames what it calls the 'cryptopocalypse' on the media, “poor asset deployment decisions”, and that Celsius got too big too fast
Almost unbelievably, the filing tries to put a brave face on things and paint this as the next step in the journey of Celsius, with claims that the proposed bankruptcy steps will “stabilize the business, consummate a comprehensive restructuring transaction that maximizes value for all stakeholders, and [allow Celsius to] emerge from Chapter 11 positioned for success in the cryptocurrency industry.”
Then the cherry on top. Mashinsky reckons that Celsius could “address its current cryptocurrency deficit” through its bitcoin-mining operations.
Celsius was only founded in 2017, but rapidly became a billion-dollar crypto lending business thanks to crypto traders and speculators. There were a couple of arms to what it did: you could deposit crypto with Celsius with the promise of high-yield returns, or take out a cash loan secured against your crypto holdings.
There were lots of small investors, but plenty of big ones too, such as the huge Canadian pension fund, Caisse de dépôt et placement du Québec, which along with an investment firm made a $400 million investment in Celsius last year that valued the company at $3 billion.
Celsius is the third huge crypto company to go down in what is looking more and more like an unstoppable decline in the value of cryptocurrencies more widely. In the first week of July both broker Voyager Digital and hedge fund Three Arrows Capital filed for bankruptcy.
“This is the right decision for our community and company,” Mashinsky wrote in a press release announcing the bankruptcy. “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.”