Celsius appoints a new legal team to navigate liquidity crisis

The Celsius Network has turned to legal experts to help it explore restructuring options. The crypto lender has hired Kirkland & Ellis LLP law firm to advise it on restructuring and help overcome the ongoing liquidity crisis.

Celsius was among the companies that were dealt a blow by the collapse of Terra LUNA and the prolonged bear market. It halted withdrawals, swaps, and transfers in May, citing “extreme market conditions.”

Celsius hires law firm to help with restructuring

The WSJ report noted that Celsius has replaced the Gump Strauss Hauer & Feld LLP with a new law firm that will advise on restructuring and find a way forward for the platform. Before halting services, Celsius was a cryptocurrency lender that also offered interest rewards to those who provided the platform with liquidity by depositing funds.

The woes on the Celsius Network were caused by the firm’s exposure to Lido. Lido is a platform that allows users to explore Ether staking. The platform is popular with small investors that cannot afford the 32 ETH needed to secure a validator node on Eth 2.0.

Buy Bitcoin Now

Your capital is at risk.

Punt Crypto Casino Banner

When users deposit ETH on Lido, they receive the stETH token. After Ethereum transitions to proof-of-stake, 1 stETH token will be redeemed for 1ETH. stETH holders will only receive ETH after Ethereum switches to proof-of-stake, and the funds on the deposit contract are unlocked.

Celsius had a massive exposure to stETH. The stETH token depegged after the market was spooked by yet another delay in the launch of ETH 2.0. The token started trading at a discount, and the massive redemptions created liquidity issues on Celsius, forcing the platform to halt withdrawals.

Celsius proves to be resilient

While Celsius was among the first crypto firms to halt withdrawals, it has shown much resilience and even raised user confidence that normalcy will be restored. Some companies such as Voyager Digital and Three Arrows Capital have already filed for bankruptcy, but Celsius is still fighting on, and there are signs that it could survive the crypto winter.

Celsius is currently reducing its liabilities despite the losses suffered. Its debt to MakerDAO has now been fully repaid. Celsius recovered its collateral of 22K wBTC after repaying this debt. The wBTC was deposited to FTX, sparking rumors that they would be dumped into the market to enable the company to repay its other debts.

Read more:

  • How to buy Cryptocurrencies
  • How to buy Bitcoin

Lucky Block - Our Recommended Crypto of 2022

Our Rating

Lucky Block
  • New Crypto Games Platform
  • Featured in Forbes, Nasdaq.com, Yahoo Finance
  • LBLOCK Token Up 1000%+ From Presale
  • Listed on Pancakeswap, LBank
  • Free Tickets to Jackpot Prize Draws for Holders
  • Passive Income Rewards - Play to Earn Utility
  • 10,000 NFTs Minted in 2022 - Now on NFTLaunchpad.com
  • $1 Million NFT Jackpot in May 2022
  • Worldwide Decentralized Competitions
Lucky Block
Visit Site
Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

Comments

Post a Comment

Popular posts from this blog

KyberSwap’s Response to Exploit: Treasury Grants for Victims

Image
Offering Financial Relief and Enhancing Security In a resolute response to a recent security breach that cost the decentralised finance (DeFi) protocol $48.8 million, KyberSwap has unveiled plans to extend a helping hand to the victims. The incident, which took place on November 22nd, has shaken the DeFi community, but KyberSwap is determined to rebuild trust and ensure the security of its platform. In relation to the KyberSwap Elastic incident that transpired from 22 November 2023, 10:54:09 PM UTC, resulting in the exploitative swaps by the exploiter that drained approximately $48.8 million of users’ funds from KyberSwap Elastic liquidity pools, we reiterate our unwavering… — Kyber Network (@KyberNetwork) December 1, 2023 Treasury Grants for Affected Users The heart of KyberSwap’s response lies in its commitment to its users. The platform is establishing a grant initiative from its treasury to compensate individuals who suffered exploitation losses. This gr
Read more

Crypto lending firm Genesis to cease offering crypto trading

Genesis has been providing trading services through its international Genesis Global Capital (GGC) division. Genesis allegedly owes its top 50 creditors $3.5 billion. In August Genesis and DCG reached an “agreement in principle” permitting creditors to get the majority of their money. Digital Currency Group (DCG) subsidiary and crypto currency loan company Genesis will no longer provide spot and futures trading for digital assets through its British Virgin Islands affiliate. A Genesis spokeswoman said in a statement on September 14 that the company will “voluntarily and for business reasons” discontinue its trading services for digital assets across all of its subsidiaries. Genesis has been providing trading services through its international Genesis Global Capital (GGC) division in the British Virgin Islands. The action comes after Genesis Global Trading (GGT), a company connected to DCG but not involved in the same bankruptcy proceedings as Genesis Glo
Read more