Read the Filing Here. In short, eight different Celsius debtors are praying from relief against creditors.
I will be updating this post with more analysis.
Update: Celsius released a statement pertaining to their Chapter 11 filing.
Today’s filing follows the … decision by Celsius … to pause withdrawals… to stabilize its business and protect its customers. 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.
What this statement says, effectively, is that (1) Celsius needed either new depositors, new revenue streams, or magic in order to avoid a flurry of lawsuits from depositors, and (2) it cannot pay its creditors.
Following the stated pause on June 12, 2022, we want you to know that we spent a great deal of time exploring our options.
These Chapter 11 cases provide the Company with the best opportunity to stabilize the business, consummate a comprehensive restructuring transaction that maximizes value for all stakeholders, and emerge from Chapter 11 positioned for success in the cryptocurrency industry.
I am doubtful that this objective will be achieved, especially in light of how they got into this mess. Also, their schtick was that they paid interest on crypto deposits.
We apologize that communication with our teams and community has been very limited over the past few weeks, and we look forward to being able to offer greater transparency with everyone through our reorganization, which encourages dialogue with all stakeholders.
There you have it, for now.