Celsius Network has filed for bankruptcy, becoming the latest crypto crash casualty.
The US-based crypto lender said its Chapter 11 filing means it will not seek permission to let customers withdraw from their accounts but would continue other normal operations.
The Celsius token (CEL) dropped more than 40% on the news, following a brief climb to $0.95. CEL was trading at just $0.52 at 10am Hong Kong time.
Celsius had paused withdrawals and transfers between accounts last month, blaming extreme market conditions.
“Without a pause, the acceleration of withdrawals would have allowed certain customers — those who were first to act — to be paid in full,” the company said in a statement.
Others, it added, would be left behind “to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery”.
Celsius said it has $167 million in cash on hand, which will provide “ample liquidity to support certain operations” during the restructuring process.
State regulators in New Jersey, Texas and Washington are investigating the company.
The current crypto crash kicked off in May with the collapse of TerraUSD and its affiliated Luna token.
Bitcoin, the most popular crypto, is hovering at around $20,000. It has lost about 8% in value over the past month and around 57% in the year to date.
- Reuters, with additional editing by George Russell