Cryptocurrency lender Celsius Network announced on Wednesday it has filed for bankruptcy, becoming the latest victim in the crypto sector to wilt under a dramatic plunge in prices.
According to a filing in the US Bankruptcy Court for the Southern District of New York, Celsius listed estimated assets and liabilities of between $1 billion and $10 billion.
As a result of the Covid-19 pandemic, cryptocurrency lenders boomed, drawing depositors with high-interest rates and easy access to loans that were previously out of reach for traditional banks.
Following the collapse of TerraUSD in May and the crash of cryptocurrency prices, they have tumbled in recent months. A second crypto lender, Voyager Digital Ltd, filed for bankruptcy on July 6 after suspending withdrawals and deposits.
In a press release Wednesday, Celsius said it has filed a series of customary motions to allow it to continue operating in the normal course of business. However, it has not requested permission to allow customer withdrawals at this time.
As part of the restructuring process, the company has $167 million in cash on hand, which will provide liquidity to support certain operations.
Last month, Celsius froze withdrawals and transfers citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets. As a result, state securities regulators in New Jersey, Texas, and Washington conducted investigations.