Celsius earlier this month froze https:// withdrawals and transfers, citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets.
The Hoboken, New Jersey, company hired restructuring consultants from advisory firm Alvarez & Marsal to advise on a possible bankruptcy filing, the Wall Street Journal reported last week, citing people familiar with the matter.
The market for digital assets in recent months has been roiled by extreme volatility as investors dump risky assets due to fears that aggressive interest rate hikes to tame stubborn inflation could plunge the economy into a recession.
The European Union has agreed on groundbreaking rules for regulating crypto assets, EU lawmakers said on Thursday, as the rout in bitcoin piles pressure on authorities to rein in the sector.
Cryptocurrencies have lost more than $400 billion since TerraUSD, a major stablecoin pegged to the U.S. dollar, collapsed in May. Bitcoin tumbled another 6% to $18,866.77 late on Thursday, leaving it down over 70% from its peak last November.
Similar to a bank, Celsius gathered crypto deposits from retail customers and invested them in the equivalent of the wholesale crypto market, including “decentralized finance,” or DeFi, sites that use blockchain technology to offer services from loans to insurance outside the traditional financial sector.
Celsius promised retail customers huge returns, sometimes as much as 19% annually. The lure of big profits has led individual investors to pour assets into Celsius and platforms like it.
Source: Economy - investing.com
