New Jersey-based cryptocurrency company Celsius Network LLC, which had frozen transfers and withdrawals earlier this month, has hired advisors to stave off bankruptcy. The company has hired experts from restructuring consultants and advisory firm Alvarez & Marsal, for advice on possible bankruptcy filings.
Celsius has cited what it termed as extreme conditions in the market. It is the latest indication of the downturn that has hit the cryptocurrency market of late.
Other reports coming in revealed that Goldman Sachs was planning to raise $2B from investors to pick up distressed assets from the company. This deal could potentially allow investors to pick up assets at high discounts if Celsius files for bankruptcy, insiders have revealed.
Celsius was holding on to $11.8B in assets as of May. The restructuring consultants and the company both have not responded publicly to requests for details.
Celsius Could Be The Latest Victim As The Crypto Currency Market Battles Extreme Volatility
The cryptocurrency market is amid extreme volatility in recent months. Investors have sought to dump assets they consider risky amidst fears that an aggressive hike in interest rates by the Federal Reserve to contain record-high inflation rates could finally push the economy into depression.
Celsius of late has become a test case for firms hit by significant volatile situations in the crypto market. This came after the cryptocurrency lending platform decided to suspend all withdrawals, transfers, and swaps between accounts in the second week of June.
CEO of Celsius, Alex Mashinsky, plus other senior officials have been mostly silent across platforms since the announcement. The platform only let on the 19th of its decision to suspend any discussion on Twitter Spaces and AMAs. This was being done, the company revealed, to renew its focus on issues it was facing with its complete operations.
Texas authorities have focused on Celsius after the company’s board decided to halt withdrawals. The director of enforcement of the Texas Securities Boards revealed that government regulators in Texas, Washington, Kentucky, New Jersey, and Alabama were looking into issues involving all frozen accounts of the company.