Celsius could experience more heat as past speculations resurface

Namrata Shukla

Now, infamous crypto lender, Celsius Network LLC has onboarded restructuring attorneys from the law firm Akin Gump Strauss Hauer & Feld LLP to help them navigate through the hot waters. Earlier on Monday, Celsius paused withdrawals along with its swap and transfer products noting “extreme market conditions.” However, the spiraling market along with this step by Celsius, pushed its asset value down by at least 70% and now the company faces extreme financial challenges.

Per reports, the company is presently focusing on financing options from investors along with exploring other strategic alternatives. These included financial restructuring, according to people familiar with the matter.

The report noted,

“Celsius is first looking for possible financing options from investors but is also exploring other strategic alternatives, including a financial restructuring, one of the people familiar with the matter said.”

No official statement has been made by the Celsius Network and Akin Gump yet.

Temperature rising with Celsius troubles

The regulatory climate around the world has gotten hot with the fall of stablecoin projects like Terra and now the rumored Celsius insolvency. Readers can understand more about the type of insolvency Celsius could find itself in the following thread.

With crypto businesses trying to brave the global economical downtrend, it would be imperative for users to focus on safeguarding their crypto investment.

As per speculations, nearly $2 billion worth of Bitcoin is tied up with the accounts and loans. However, the firm claimed to manage roughly $11 billion even after the Terra LUNA, and UST crash.

It can be noted that in November 2021, Celsius CFO Yarom Shalem was arrested in Tel Aviv allegedly in relation to investor fraud worth tens of millions of U.S. dollars.

At the time, Celsius’ high-interest rates and regular payouts led to the suspicion that it funds those payouts from sources other than its own investment or, simply a Ponzi scheme. Although the company has time and again denied any such act, today’s situation has refreshed the past issues especially, its involvement with Tether and the extended network of Tether companies, including BitFiniex and iFinex.

Not much clarity has been obtained in the current matter as users wait for Celsius to reveal the type of insolvency it faces. In the meantime, CEL was changing hands at $0.5065, up by 1% in the past hour at press time.