5 Days ago, the crypto service provider Celsius suspended withdrawals from its customers. Users are worried about their money, even a lawsuit is brought.
Meanwhile, we count 5 days when users are worried about their money and can not make withdrawals. Instead of high interest income, a restructuring of the Celsius network is supposedly on the doorstep.
Celsius has asked the law firm Akin Gump Strauss Hauer & Feld LLP, which specializes in restructuring, for help, according to insider circles. These insiders are said to have told the Wall Street Journal, that Celsius is considering an alternative financing of investors together with a structural change.
The law firm has already successfully averted insolvencies in the past, such as those of NAC – one of the largest aircraft rental companies. For this achievement, the firm received an award in the Global Restructuring Review, a leading medium in this field.
@CelsiusNetwork team is working non-stop. We’re focused on your concerns and grateful to have heard from so many. To see you come together is a clear sign our community is the strongest in the world. This is a difficult moment; your patience and support mean the world to us.
– Alex Mashinsky (@Mashinsky) June 15, 2022
CEO Alex Mashinsky confirmed on Twitter that the network is going through hard times. Another medium, in turn, claims to have received information from internal sources about a cooperation between Celsius and Bank Citigroup. The bank is one of the four largest banks in the United States, along with Bank of America, JPMorgan Chase and Wells Fargo.
In the role of consultant, Citigroup Celsius is now supposed to help out of trouble, it is not clear whether money should flow for this. The Block refers to the internal source:
“It’s not that Citi would just give money from the balance sheet to Celsius.”
The advisory function should primarily serve the further steps in connection with the financing. In addition, an offer to acquire the remaining assets, which was made by competitor Nexo, is still open. According to the insider, Citigroup and Celsius already know each other from previous consultations: the bank is said to have already helped the crypto company with its mining subsidiary and initial coin offering.
The network still managed about $12 billion in assets in mid-May.
YouTuber files lawsuit against the Celsius Network
Crypto YouTuber Ben Armstrong is even ready to go to court! According to his Twitter post, the platform does not allow him to withdraw money without transferring new money in front of it:
Today, the YouTuber is preparing to file a lawsuit against Celsius Network and its CEO Alex Mashinsky. Users could already predict that the company would not like his Twitter posts. The YouTuber was warned by email to refrain from further tweets against the company.
There is good news from the U.S. Senate. Two senators are said to have introduced a proposal to protect investors in the event of the insolvency of a crypto company. According to this, investors’ money should no longer be able to be seized in the event of insolvency.
Only a few weeks ago, it became known through Coinbase that investor assets would be part of the insolvency proceedings in the event of bankruptcy. The Coinbase CEO then reiterated that the company is not at risk of bankruptcy.
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