Embattled crypto-lending platform Celsius has kept withdrawals and transfers frozen since June 12, telling the Celsius Network community “the process takes time ” it informed. Since then, Celsius users have wondered why they are still receiving their weekly fees, and according to reports, the company’s management has been discussing with lawyers whether the business should file for Chapter 11 bankruptcy. However, most recent Celsius articles cite “people familiar with the matter,” and ultimately these sources cannot be verified.
Celsior’s clients say it is “insulting” that the lender is still paying weekly fees.
Sixteen days ago, crypto-lending platform Celsius told customers that it was suspending swaps, transfers, and withdrawals, without mentioning when the company would reinstate the service. Since then, Celsius has been struggling financially and is speculated to be potentially insolvent.
Last week, the Wall Street Journal (WSJ) reported that the company was receiving restructuring advice from advisory firm Alvarez&Marsal Marsal. A subsequent separate report said that Goldman Sachs was considering purchasing distressed assets from the company “at a potentially significant discount in the event of a bankruptcy filing”,
Additionally, on June 27, Simon Dixon, CEO of Bnktothefuture, wrote that he still receives weekly compensation from the firm despite frozen withdrawals. ‘I just got an email on one of my accounts,’ Dixon writes. ‘I can’t withdraw, but Celsius Network is still paying me my commissions. I am curious if you think the rewards should still be coming . Thoughts” Dixon added
Some members of the crypto community called the dispersion of weekly rewards offensive.” This is honestly insulting andCelsius Networkis still paying my weekly rewards while holding my crypto hostage,” the individualtweetedon Monday.
Meanwhile, some users asked if there was any on-chain activity attributed to Celsius Network or if capital was being moved.” Is anyone still maintaining funds from Celsius Network’s on-chain activity? If they are still paying back loans/transferring capital, etc…” One personwroteon Twitter.
Anothersaidthat it is likely a legal chess move by Celsius management.” On Monday, this individual tweeted that if they stopped “paying” the compensation possibly still because they violated the terms of the service (contract) and then there is no legal reason to hold your funds in earning any more.
According to sources, Celsior has been discussing its Chapter 11 filing with its lawyers – most of Celsior’s articles over the past week have quoted “people in the know” about the situation
The same day, Andrew Rummer of theblock.coreportsthat Celsior’s attorneys are hoping the company will file for Chapter 11, which, according to Rummer’s report, would be the most expensive of all bankruptcy proceedings. Rummer reports that the company opposes the proposal to file for Chapter 11, the most expensive of bankruptcy proceedings.
This reporter’s source comes from “someone who knows the situation,” which is an ongoing trend as far as Celsior news is concerned. many reports from theblock.co, WSJ, Bloomberg, and other publications that cover Celsior Network topics are quotes from people who are familiar with the issue.
For example, the WSJ claimed that someone familiar with the matter said that Celsius was working with the restructuring law firm Akin Gump Strauss Hauer &It reportedly is working with Feld LLP. Not long after that report, however, the WSJ again quoted a person with knowledge of the situation, noting that Celsius was seeking advice from the restructuring advisory firm Alvarez & Marsal.
When The Block author Yogita Khatri cited two sources “familiar with the matter,” it was theblock.co that wrote about Celsius looking for help from financial giant Citigroup. Additionally, it was crypto publication Coindesk that reported that Goldman Sachs was looking to purchase distressed assets from Celsius; according to Coindesk author Tracy Wang, that information came from “two people familiar with the matter.”
The Block’s Rummer said his source claimed that Celsius was “precluded from making any public announcement because of legal advice.” The source claimed that Celsius Network users want an alternative to bankruptcy proceedings.
“To that end, users can show their support by engaging the ‘HODL mode‘ in their Celsius accounts. People with their Celsius accounts said,” Rummer wrote Monday. With anonymous sources, people who know what’s going on, and people who are involved, it’s hard to find accurate information about what Celsius is actually doing to solve the problem.
People seem to be inclined to wait for an official statement from Celsius, since most other things are hearsay or speculation. However, there is no certainty as to when Celsius will respond to the problem you are facing, and until then, you have to rely on so-called individuals who know what is going on.
What do you think about the recent media reports about Celsior? Do you think the sources of those “in the know” on the issue are legitimate? Let us know what you think about the Celsior topic in the comments section below.
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