The U.S. crypto lender Celsius Network announced on Wednesday that it has filed for bankruptcy. It is the latest company in the cryptocurrency industry to fail because of the sharp drop in prices.
From New Jersey, In a court filing with the U.S. Bankruptcy Court for the Southern District of New York, Celsius estimated that its assets and debts, taken together, were worth between $1 billion and $10 billion.
During the COVID-19 pandemic, crypto lenders did very well. They could attract depositors with high-interest rates and easy access to loans that traditional banks rarely give out. In the past few months, however, they have fallen after the prices of cryptocurrencies crashed and a significant token, TerraUSD, went bankrupt in May.
Voyager Digital Ltd. (VOYG.TO), another cryptocurrency lender, filed for bankruptcy on July 6 after stopping withdrawals and deposits.
Celsius said in a press release on Wednesday that it is not asking for permission to allow customer withdrawals. It also said that it had filed a series of standard motions with the court to allow it to keep doing business as usual.
The company has $167 million in cash, which will give it the money it needs to keep some operations running while it is reorganizing.
Last month, Celsius stopped withdrawals and transfers because of “extreme” market conditions. This meant that 1.7 million of its customers couldn’t get their assets back. State securities regulators in New Jersey, Texas, and Washington looked into the decision as the situation worsened.